What happens when you have the credit, income, and assets to buy your dream home, but the lender rejects the home itself?
If you can’t pay cash, you are left scrambling to find private financing. If you’ve already made an offer on the house, that can be stressful and embarrassing. It is better to know right upfront what types of properties Fannie Mae will not lend on.
10 Types of Homes that are Ineligible for a traditional loan backed by Fannie Mae
1) Bed and Breakfast homes
2) Houseboats
3) Senior Care Home or other continuing care facility
4) Timeshares
5) Condo or home where the Home Owner’s Association is named in a pending lawsuit
6) Homes with five or more units (a duplex, triplex, or fourplex is acceptable)
7) Manufactured homes that have not had the title converted to real property
8) A working farm or ranch or agricultural property (You would need a commercial loan for that.)
9) Raw land (Land with no house cannot qualify for a residential loan. You would need a land loan.)
10) Any house that is unsuitable for year-round living or is not accessible by road.
This represents the ten most common ineligible properties. There are others, such as a motel or hotel.
If you aren’t sure whether or not your dream home qualifies for a traditional loan or if you want to purchase an unusual property, discuss it with your loan officer right up front when you are getting pre-approved.
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