Simultaneous Closing and Fannie Mae Guidelines

19 Replies

Is a simultaneous close within Fannie Mae guidelines...? I am looking to close on a flip and trying to locate a title agency that will do the simultaneous close. The agency rep indicated they could do the closing if it was within the guidelines...

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666

Originally posted by @Jamaal McDonald:

Or you can just assign your rights

 Not interested in assigning...doesn't make sense in my opinion...assigning and double closing are two very different things...

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666

I am not positive, but I think the guidelines are going to relate to restrictions on FNMA loans to an end buyer.  Any restrictions on your purchase will be in your purchase contract ( I am assuming you are buying from FNMA).  It has been getting much harder for some time to find a title agency willing to do simultaneous closings.  Your rep should be able to quickly tell you if they will or not, without sending you on a research mission of FNMA guidelines.

Ted Akers, Transactional Funder

Are you buying a FNMA REO, and trying to double close to another buyer--paying cash or financing? OR Are you trying to double close with a FNMA financed buyer?

Originally posted by @Ted Akers:

I am not positive, but I think the guidelines are going to relate to restrictions on FNMA loans to an end buyer.  Any restrictions on your purchase will be in your purchase contract ( I am assuming you are buying from FNMA).  It has been getting much harder for some time to find a title agency willing to do simultaneous closings.  Your rep should be able to quickly tell you if they will or not, without sending you on a research mission of FNMA guidelines.

 Thanks, Ted.

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666

Originally posted by @Wayne Brooks:

Are you buying a FNMA REO, and trying to double close to another buyer--paying cash or financing? OR Are you trying to double close with a FNMA financed buyer?

 This would be a wholesale deal that is off-market...I presume the end buyer would be using cash or a portfolio/ hard money lender to close...

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666

@Brandon Sturgill  

From what I know if you're wholesaling a Fannie Mae property, you can't resell more than 120% of selling price within 90 days of purchase.

Ex. List Price- $100K, under contract for $80K, cant not sell for more than $96K.

@Brandon Sturgill  who is the seller you are buying from? If this is truly off market then I doubt it is FNMA, since in my understanding they have fairly strict requirements for all properties to be listed on the open market prior to accepting a contract.

Regardless, if it is a FNMA property then you can still simultaneous close as long as it's within their guidelines for resale - they will usually put a deed restriction on the property as mentioned by @Winston Spence  above. The challenge is that most of the time they want you to work with their own choice of title company which makes it tricky. 

I would suggest transactional funding or splitting the deal with a partner who has cash to close and setting up the sell side closing for the afternoon of, or day after, you purchase.

You can also sell on a lease-option to the end buyer if your sell side price is higher than the deed restriction will allow. Have your end buyer pay you 50% option fee, they will then exercise the option on day 91 and you can transfer title and get the rest of the cash at that time.

Originally posted by @Chris Kennedy:

@Brandon Sturgill who is the seller you are buying from? If this is truly off market then I doubt it is FNMA, since in my understanding they have fairly strict requirements for all properties to be listed on the open market prior to accepting a contract.

Regardless, if it is a FNMA property then you can still simultaneous close as long as it's within their guidelines for resale - they will usually put a deed restriction on the property as mentioned by @Winston Spence  above. The challenge is that most of the time they want you to work with their own choice of title company which makes it tricky. 

I would suggest transactional funding or splitting the deal with a partner who has cash to close and setting up the sell side closing for the afternoon of, or day after, you purchase.

You can also sell on a lease-option to the end buyer if your sell side price is higher than the deed restriction will allow. Have your end buyer pay you 50% option fee, they will then exercise the option on day 91 and you can transfer title and get the rest of the cash at that time.

 Thanks for the info, Chris

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666

Originally posted by @Wayne Brooks:

@Brandon Sturgill Where in FNMA in this?

 No Fannie...just a plain ol' wholesale deal...the hangup is the vagueness of the title company.

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666

@Brandon Sturgill  

Okay, the FNMA guidelines have nothing to do with this transaction.  Not sure how they came up?  Simultaneous/double closings are no big deal, as long as you are Not trying to end the use the end buyer's funds to do the first transaction.

@Brandon Sturgill  

FNMA guidelines have nothing to do with your scenario, unless you are selling to a buyer using a conventional FNMA mortgage.  In that case most lenders will want to see a 90 day holding period, or "title seasoning", before they would fund your end buyer (unless the buyer puts 20% down); and this has nothing to do with your off market purchase.  Your title rep should be able to give a fast yes or no to you. 

Ted Akers, Transactional Funder

Use Transactional Funding and forget about using the end buyer's funds like the gurus teach. Most Transactional Funding will only cost 1% of the purchase price.


Joe Gore

Originally posted by @Wayne Brooks:

@Brandon Sturgill 

Okay, the FNMA guidelines have nothing to do with this transaction.  Not sure how they came up?  Simultaneous/double closings are no big deal, as long as you are Not trying to end the use the end buyer's funds to do the first transaction.

 Thanks

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666

Originally posted by @Ted Akers:

@Brandon Sturgill 

FNMA guidelines have nothing to do with your scenario, unless you are selling to a buyer using a conventional FNMA mortgage.  In that case most lenders will want to see a 90 day holding period, or "title seasoning", before they would fund your end buyer (unless the buyer puts 20% down); and this has nothing to do with your off market purchase.  Your title rep should be able to give a fast yes or no to you. 

 Thanks, Ted

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666

Originally posted by @Joe Gore:

Use Transactional Funding and forget about using the end buyer's funds like the gurus teach. Most Transactional Funding will only cost 1% of the purchase price.


Joe Gore

 Thanks, Joe. Just trying to avoid assigning the contract. I really have not explored transactional funding...I have just heard it is expensive...

Medium grey red iconBrandon Sturgill, Hypothetical Insight, LLC. | [email protected] | 614‑379‑2017 | http://www.InvestHypothetical.com | OH Agent # 2015001666