It's all about structure I guess.If they assume the mortgage and then want to refinance to get cash out, which is what I thought he wanted to do, the Fannie Mae eligibility matrix caps him at 75% for a single unit and 70% if it's a 2-4 unit.  

They are doing a renovation loan like the FHA 203k, or the Fannie Mae Homestyle, or the Freddie Mac ChoiceRenovation. 

It's a large property.I got a couple of loan applications rejected because apparently, any lender under Fannie Mae has a rule against lending for purchase of a property where the tenant is a caretaker.

Ryan.Fannie Mae is difficult to work with and you have to make sure you have everything in order to make the process simple when you refinance.

We just purchased a 3rd SFH using conventional Fannie Mae financing with 5% down. 

Yes, you can have up to 10 financed properties with Fannie Mae.

These are not Fannie Mae loans. 

@Corby Goade "HomePath" is technically homes that are owned by Fannie Mae that they are selling directly. 

I checked online and the house was a Fannie Mae and was mortgaged in 2015 for $35,000.         

You will have to come out of pocket with any necessary rehab (as well as closing costs and escrow prepays, of course).Homepath (Fannie Mae REOs) has a special program for selling their REOs where they'll permit 10% down.