These loans are NOT sold off as MBS, but are instead held on the balance sheet of the originating bank.I am not a banker, so my explanation may not be picture perfect, but that is a rough idea of how that world operates.As @Chris Martin mentions, the GSE underwriting looks at ALL mortgages you are involved with of any significance, so you could potentially choose to do a couple more Fannie deals before going ahead with the portfolio route, but you can't do it the other way around.  

Thanks a lot @Will Barnard for the in depth explanation on land trusts.

Thanks Jim Johnson for your explanation.

Thx for the detailed explanation!

Don't feel as though I owe you any explanations but for the benefit of others who may read your rather brash and unwarranted reply it goes something like this.I started as a general contractor in 1986 doing rehabs and retrofitting on MH's and due to some of the trades I was performing on them was required to get a MH contractors license as well.

OK, your explanation this time made more sense.  

@Curt Davis Thanks for the explanation.

@Steven Hamilton II , thanks for your explanations.

Again - it all hinges on what the seller's needs are, and how motivated they are to sell.This whole "seller financing" subject can go pretty deep, and down many different tangents, but let me know if you need more explanation or ideas on how to make it work.

@j scott great explanation.