Fannie Mae to make repairs? WHAT?

[EtereoX]

So the wife and I just put an offer in on a house we fell in love with (I'm sure I'll have more questions about the headaches-to-come in the coming weeks) ... Our offer was accepted but Fannie Mae (foreclosed REO home) said they wanted to extent closing out to August 20th so that they could make sure the house passes FHA inspection.

We asked what specific fixes they were going to make and are waiting to hear back...

... This can only be a good thing right? From everything I've read/heard Fannie Mae notoriously REFUSES to do any repairs. Has anyone had any similar experiences with them? 

[ShanetheMortgageMan]

That is a new one for me, never have had Fannie Mae make repairs to a property they own... they've just required the buyers to be cash or to use a rehab loan program.  Is the home listed at HomePath.com?  Perhaps you can find more info about what type of issues they found on there.

[coterotie]

Fannie is spending money hand over fist on homes they own down here.  Here they list the property, then pull the property out of the database, make repairs, paint, replace carpet (seen this on at least 10 different properties as well as talked with a home improvement company that is getting fat off the work).  A chunk of what they do is necessary, eg. cleanup from pet stains etc.  Some is questionable.  Once they have the work done they put it back on the market.  Sometimes this takes a few weeks sometimes several months.  The interesting thing is they won't even entertain an offer before they spend the money.  We tried to buy a house right after the first listing.  For their asking price.  So they pulled the listing, spent 10 to 15K somewhat ill advisedly, then sold it for less than the original list price.

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@ShanetheMortgageMan wrote:

That is a new one for me, never have had Fannie Mae make repairs to a property they own... they've just required the buyers to be cash or to use a rehab loan program.  Is the home listed at HomePath.com?  Perhaps you can find more info about what type of issues they found on there.

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[StartingOver10]

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@coterotie wrote:

Fannie is spending money hand over fist on homes they own down here.  Here they list the property, then pull the property out of the database, make repairs, paint, replace carpet (seen this on at least 10 different properties as well as talked with a home improvement company that is getting fat off the work).  A chunk of what they do is necessary, eg. cleanup from pet stains etc.  Some is questionable.  Once they have the work done they put it back on the market.  Sometimes this takes a few weeks sometimes several months.  The interesting thing is they won't even entertain an offer before they spend the money.  We tried to buy a house right after the first listing.  For their asking price.  So they pulled the listing, spent 10 to 15K somewhat ill advisedly, then sold it for less than the original list price.

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@ShanetheMortgageMan wrote:

That is a new one for me, never have had Fannie Mae make repairs to a property they own... they've just required the buyers to be cash or to use a rehab loan program.  Is the home listed at HomePath.com?  Perhaps you can find more info about what type of issues they found on there.

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I have seen Fannie Mae spend money on homes to move them - specifically so a primary buyer going FHA can purchase it without appraisal issues. However Fannie is also pushing their Homepath loan too.  You do have to be careful though - I have seen some funky improvements made (painting over wood rot for example). So inspect the homes very, very carefully.

Not every Fannie Mae property gets improved - some are just as Shane states - bad condition where the buyer has to pay cash or come in with a rehab loan.

I'm not sure what Fannie uses to differentiate the properties as to which get the improvements and which don't.

[ShanetheMortgageMan]

I suspect if they determine they can get a significantly higher price than the amount of the repair costs, that is when they figure it's worth it.  That'd explain painting over wood rot rather than replacing the wood.