Can anyone advise on whether Fannie Mae will pay for a new septic system in a short sale? This house cannot be sold without a passing system and homeowner has no money. Could be 25k.....


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Well, in my state it can't sell unless it passes the test (400.00)
This is never something an insurance company covers. The homeowner does not have the money for the test. The buyers would pay for repairs and the test but Fannie is insisting on a high offer. Will all the repairs the house needs, it's not going to happen. When it goes to foreclosure they will get MUCH less. And it cannot be financed.

You need to complete a value dispute as no investor will pay for repairs prior to closing. Some investors may allow a credit for repairs, but it's typically better to just lower the purchase price as this is more likely to be approved. Work towards getting two bids for the septic system. Do you have inspections showing that the septic system needs to be replaced? If there are additional repairs I'd be looking into getting two contractor bids with itemized expenses and colored photos of the repairs. Put together a CMA and/or provide an appraisal along with the bids. You need to push Fannie to accept a lower value so the buyer has enough room to complete the repairs.

Feel free to reach out to me anytime with any questions as my door is always open.

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