Fannie Mae 'Due on Sale' Exemption

2 Replies

Here is a link ( https://www.fanniemae.com/content/guide/servicing/d1/4.1/02.html) to Fannie Mae exemptions to "Due on Sale" clause that includes the following: 

transfer to a limited liability company (LLC), provided that:

  • -the mortgage loan was purchased or securitized by Fannie Mae on or after June 1, 2016, and

    -the LLC is controlled by the original borrower or the original borrower owns a majority interest in the LLC, and if the transfer results in a permitted change of occupancy type to an investment property, such change does not violate the security instrument (for example, the 12 month occupancy requirement for a principal residence).

  • Lots of discussion on here over the years about Due on Sale clauses and thought this might help.

Does a new servicer of a mortgage potentially impact this definition? (e.g., a mortgage is being refinanced with fannie mae and 6 months later it's sold to someone else and now we're paying this new bank our mortgage payments?)

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you