Fannie Mae Selling Guide B2-1.3-05 — Payoﬀ of Installment Land Contract Requirements

fnma-sel-b2-1-3-05

Fannie Mae Selling Guide B2-1.3-05 — Payoﬀ of Installment Land Contract Requirements.

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      paragraph_quote: B2-1.3-05, Payoﬀ of Installment Land Contract Requirements (12/11/2024) Introduction This topic contains requirements for the payoﬀ of installment land contracts. Payoﬀ of Installment Land Contract Requirements Payoﬀ of Installment Land Contract Requirements When the proceeds of a mortgage loan are used to pay oﬀ the outstanding balance on an installment land contract (also known as contract or bond for deed) that was executed within the 12 months preceding the date of the loan application, Fannie Mae will consider the mortgage loan to be a purchase money mortgage loan. The LTV ratio for the mortgage loan must be determined by dividing the new loan amount by the lesser of the total acquisition cost (deﬁned as the purchase price indicated in the land contract, plus any costs the purchaser incurs for rehabilitation, renovation, or energy conservation improvements) or the appraised value of the property at the time the new mortgage loan is closed. The expenditures included in the total acquisition cost must be fully documented by the borrower. When the installment land contract was executed more than 12 months before the date of the loan application, Fannie Mae will consider the loan to be a limited cash-out reﬁnance in accordance with B2-1.3-02, Limited Cash- Out Reﬁnance Transactions. In this case, the LTV ratio for the mortgage loan must be determined by dividing the new loan amount by the appraised value of the property at the time the new mortgage loan is closed. Cash-out reﬁnance transactions involving installment land contracts are not eligible for delivery. Published May 6, 2026 188 Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2024-08 December 11, 2024 Section B2-1.4, Loan Amortization Types

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Verbatim provisions from Fannie Mae Selling Guide B2-1.3-05 — Payoﬀ of Installment Land Contract Requirements — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

Fannie Mae Selling Guide B2-1.3-05 — Payoﬀ of Installment Land Contract Requirements

B2-1.3-05, Payoﬀ of Installment Land Contract Requirements (12/11/2024) Introduction This topic contains requirements for the payoﬀ of installment land contracts. Payoﬀ of Installment Land Contract Requirements Payoﬀ of Installment Land Contract Requirements When the proceeds of a mortgage loan are used to pay oﬀ the outstanding balance on an installment land contract (also known as contract or bond for deed) that was executed within the 12 months preceding the date of the loan application, Fannie Mae will consider the mortgage loan to be a purchase money mortgage loan. The LTV ratio for the mortgage loan must be determined by dividing the new loan amount by the lesser of the total acquisition cost (deﬁned as the purchase price indicated in the land contract, plus any costs the purchaser incurs for rehabilitation, renovation, or energy conservation improvements) or the appraised value of the property at the time the new mortgage loan is closed. The expenditures included in the total acquisition cost must be fully documented by the borrower. When the installment land contract was executed more than 12 months before the date of the loan application, Fannie Mae will consider the loan to be a limited cash-out reﬁnance in accordance with B2-1.3-02, Limited Cash- Out Reﬁnance Transactions. In this case, the LTV ratio for the mortgage loan must be determined by dividing the new loan amount by the appraised value of the property at the time the new mortgage loan is closed. Cash-out reﬁnance transactions involving installment land contracts are not eligible for delivery. Published May 6, 2026 188 Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2024-08 December 11, 2024 Section B2-1.4, Loan Amortization Types

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