Convention Loan- Can seller hold 2nd if appraisal comes in Low?

[Ray Slack]

Can a Seller hold a 2nd mortgage on a conventional Loan?

Selling Price $200,000

Down payment 5% ($10,000)

Loan amount $190,000

The appraisal comes in at $191,000

Will banks or Fannie mae/freddie mac allow the seller to hold a 2nd mortgage (roughly $9,000) for the difference between the Sales Price and appraised value so the bank would still only be loaning 95% of the appraised value? Or do they need the entire downpayment coming from the buyer? 

Hope this makes sense.

Thanks