Today, I got a hurried email from my agent. There were two additional forms that needed to be filled out to submit the offer. They needed done ASAP. These were pretty curious contracts and they related directly to the status of the house.
I mentioned the home was a foreclosure and it is owned by Fannie Mae (FNMA). FNMA has a program called HomePath, which is actually pretty cool. HomePath restricts the sale of the property to investors for a period of time, to give actual occupant owners the first chance at buying the property. I’m really negative on house-flippers, so I like the concept of HomePath. These contracts spell out some things about buying a foreclosure in the HomePath program.
The first is a 13-page addendum primarily concerning the as-is condition of the property. And that means really “as-is.” When the deal closes, you may get a house that’s uninhabitable. It may have tenants, it may be hazardous, it may have liens on it, you may not get any keys for the property, anything can happen. Yikes. So, you really need to be good with your title insurance and home inspection.
The other one (and this also sort of covered in the first) is that you must live in the house. The purpose of HomePath is to sell to people who are going to live in the house, not resell it or even rent it. The first agreement says you can’t sell the house for more than x dollars within y months. The second agreement says you will move in within 60 days and you will live there at least a year.
Pshh. It’s just words, right? Well, if you break the second agreement, you get fined $10,000 plus legal fees. That’s right. FNMA is serious.