Help with a prohibitive clause with Fannie Mae

[Lance Schaefer]

I am making offers on Fannie Mae REO's through Homepath.com. In their offer to purchase contract there is a clause that says it is not assignable. Does anyone have a way around this?

I want to wholesale to rehabbers and landlords etc. and I have heard that you can ADD another party with me as a buyer, and then at closing quit claim deed to them (my end buyer) and all is well. Anyone do this? Any other ideas? Thanks.

[John Newland]

With a Fannie Mae REO, per their addendum, you ARE able to re-sell the property within 90 days, however, you cannot sell it for more than 20% of your purchase price within the 90 day deed restriction period (as stated above you will not be able to assign.) Depending on your purchase price, that 20% margin could mean a nice spread or something that is not worth your time. You would need to utilize your own cash or transactional funding to close your offer, after which, you should be free to re-sell immediately after (please correct me if I am wrong) as long as you keep your profit at/under 20%.

If you want to sell it under the 90 days for more than 20%, packaging it with a business entity and selling your interest/the entity itself as J Scott mention is the way to go.

There are some bank addendums that strictly prohibit a sale within a set period of time. I have a deal in the works on a Bank of America property that prohibits a sale within 60 days of closing.