Loans · Fannie Mae Selling GuideProperties Fannie Mae won't finance – and what an eligible property must be

Before a buyer counts on a conventional loan, the property itself has to qualify. Fannie Mae's Selling Guide (B2-3-01, General Property Eligibility) covers first mortgages on residential properties of one to four units – a one-unit home with an accessory dwelling unit is still one unit – located in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands or Guam. The property must be residential in nature, real property, safe, sound and structurally secure, at its highest and best use with a legal or legal non-conforming use, reachable by roads that meet local standards, served by utilities that meet community standards, and suitable for year-round use – a resort-area home qualifies only if it is. Title can be fee simple (including a life estate), a leasehold estate or a co-op; but 'lady bird' deeds and typical statutory transfer-on-death deeds don't qualify as life estates, because the successors' rights aren't vested and irrevocable. Ineligible: vacant land or land development properties, properties without road access that meets local standards, agricultural properties such as farms or ranches, units in condo or co-op hotels, property that isn't real estate – houseboats, boat slips, timeshares – boarding houses, bed and breakfasts, and properties not suitable for year-round occupancy. Group homes are not boarding houses and are eligible. Condos, co-ops and PUDs must also meet Fannie Mae's project standards.