Question on wholesaling Fannie Mae?

[Mikel Graham]

I know this has been covered a bit in the past (and yes I'm going through the threads). But I do have one question that I'm not 100% clear on.

Apparently, there is a "carry with the land" statement in the 90-day/20% restriction.

Just to be 100% clear... does this mean that, even if I pay for the property in full, 100% cash, I'm still not allowed to sell within 90 days and more than 20% profit?

Just seems strange that such a restriction would continue to apply once the property is fully paid for.

I ask because I'm staring at a great wholesale deal (would be my first). The price is $79/sq. ft. and similar houses in the area (like within a few blocks) are going for $130-150/sq. ft. I believe I can wholesale this but my only hesitation is that it is a Fannie Mae property.

I'm aware of the 'trust' workaround and will most likely use that method and pursue this.

Any and all help would be appreciated.

M

[J Scott]

Bill -

You're confusing the FNMA resale restriction with the FHA resale restriction -- they are two very different restrictions.

The FNMA restriction is still in force, and restricts someone who purchases a FNMA foreclosure from reselling (or otherwise encumbering) the property for 90 days after purchase for more than 120% of the purchase price.

The FHA restriction (which has been waived since 2010) restricts FHA buyers (the people you might want to sell your rehabbed property to) from getting a loan on an FHA property until the seller (you in this case) has owned the property for at least 90 days. But again, that restriction is currently waived through 2012.

And again, the FNMA restriction is still very much enforced.