Mortgage Navigator • Conventional • Can This Be Done?

Land Contract / Contract for Deed

The same property can be treated as a purchase or a refinance depending largely on when the land contract was executed.

Fannie: within 12 months

If the installment land contract was executed within the 12 months before loan application, Fannie treats the payoff as a purchase. LTV is based on the lesser of current appraised value or documented total acquisition cost.

Fannie: more than 12 months

If executed more than 12 months before application, Fannie treats the payoff as a limited cash-out refinance and uses current appraised value for LTV. Fannie does not permit a cash-out refinance of an installment land contract.

Freddie

Freddie uses a similar dividing line: less than 12 months can qualify as a purchase; at least 12 months can qualify as a no-cash-out refinance with required payment documentation.

Why this matters: waiting until the contract crosses 12 months can materially change the value basis and transaction classification.

Official agency baseline

Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide

These are agency-level rules. AUS findings, mortgage insurance, product restrictions and lender/investor overlays can still affect a real loan.