Does Fannie Mae only allow 2% Seller Credits?

[Mary K.]

Newbie here looking for advice on a deal. I put an offer on an out of state 3-unit listed at $100K (price had dropped over several months to this from $140K) and got it under contract for $95K. Not a great deal but it will cash flow. It had been advertised as "rent ready" and no repairs needed, so we ordered appraisal (came out at $100K) and inspection. Inspection found $10K-15K or so in work to make it safe and habitable - water damage, unsafe electrical issues, etc. Only 1 of 3 units is rented for below market. Market rents would be $1450, so about 1.5%.  Tenants pay all utilities.

The elderly widow seller wouldn't lower price further or owner finance. My mortgage broker said a Fannie Mae conventional loan with 25% down allows only 2% max seller credit for closings or repairs, not nearly enough to cover repairs. Is this true?  I thought I had heard you could go up to 9% seller credits on Fannie Mae? 

I don't want to pay $95K and put 10-15K into it and have more into it than it appraises for so for now the deal is off. I also had hoped to make a few improvements and refi in a year and get some or all my cash out - the BRRR strategy.

Anyone have a suggestion on how to make this deal work (with as little cash as possible)? 

[Russell Brazil]

Yes investment property loans are limited to a 2% credit. Owner occupied conventional loans are limited to 3%. FHA loans are limited to 6%.