I spoke with Lori @ FNMA & Susan @ FHLMC.  Because this is a contract for conditional sale of real estate they consider this a property under contract & would look at it more like notes receivable income that must be received for 12 months & have at least 3 years continuance.  This is different than a typical land contract which is usually amortized over 10-30 years.  The reason it is looked at differently then a standard rental lease is because with a contract for sale they cannot just release the property it cannot be determined how the income will be reported

It's very common for a lease with option to purchase type contract (sorry I know that is not the exact verbiage on this contract but I don't have the loan number so I couldn't review it).  Typically land contracts are amortized over 10 plus years so you have continuance.  Please provide me with the loan number & I will call FNMA

Original question:

Jen - this is a follow-up to our land contract deal

Borrower selling house on land contract and full balance due Feb 2020-  another lender telling him they can wash this payment?

Realtor said this is very common land contract verbiage, before you had said it was weird to have balloon payment due

How can another lender do this and we cant?  Its a company similar to ours and borrower says he asks LO that directly and LO ran it by U/W-  I don't 100% believe this but I also don't want to lose $550K purchase if we can do it

And last question-  if we can not wash land contract, what if he buys lake house as an investment-  can we order a rent schedule and count the rent to wash the payment?

thanks