source:
  type: guide
  id: fnma-sel-b7-2-05
  authority: Fannie Mae Selling Guide B7-2-05 — Title Exceptions and Impediments
  description: Fannie Mae Selling Guide B7-2-05 — Title Exceptions and Impediments.
  coverage_tier: operative
obligations:
- id: fnma-sel-b7-2-05-full
  canonical_id: fnma-sel-b7-2-05-full
  section: Fannie Mae Selling Guide B7-2-05 — Title Exceptions and Impediments
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B7-2-05 — Title Exceptions and Impediments
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B7-2-05, Title Exceptions and Impediments (07/06/2022) Introduction
      This topic contains information on title exceptions, including: Title Exceptions
      Minor Impediments to Title for Conventional Loans Title Impediment – Loans Secured
      by Properties with Unexpired Redemption Periods Title Exceptions Fannie Mae
      will not purchase or securitize a loan secured by property that has an unacceptable
      title impediment, particularly unpaid real estate taxes and survey exceptions.
      If surveys are not commonly required in particular jurisdictions, the lender
      must provide an ALTA 9 Endorsement. If it is not customary in a particular area
      to supply either the survey or an endorsement, the title policy must not have
      a survey exception. Minor title impediments must not materially aﬀect the marketability
      of the property. The lender must indemnify Fannie Mae (as described in A2-1-03,
      Indemniﬁcation for Losses) for any Fannie Mae losses that can be directly attributed
      to the impediment(s). Published May 6, 2026 851 Minor Impediments to Title for
      Conventional Loans Title for a property that secures a conventional loan is
      acceptable even though it may be subject to the following conditions, which
      Fannie Mae considers minor impediments: customary public utility subsurface
      easements that were in place and completely covered when the loan was originated,
      as long as they do not extend under any buildings or other improvements; above-surface
      public utility easements that extend along one or more of the property lines
      for distribution purposes or along the rear property line for drainage purposes,
      as long as they do not extend more than 12 feet from the property lines and
      do not interfere with any of the buildings or improvements or with the use of
      the property itself; mutual easement agreements that establish joint driveways
      or party walls constructed on the security property and on an adjoining property,
      as long as all future owners have unlimited and unrestricted use of them; restrictive
      covenants and conditions, and cost, minimum dwelling size, or set back restrictions,
      as long as their violation will not result in a forfeiture or reversion of title
      or a lien of any kind for damages, or have an adverse eﬀect on the fair market
      value of the property; encroachments of one foot or less on adjoining property
      by eaves or other overhanging projections or by driveways, as long as there
      is at least a ten-foot clearance between the buildings on the security property
      and the property line aﬀected by the encroachment; encroachments on adjoining
      properties, as long as those encroachments consist only of hedges or removable
      fences; outstanding oil, water, or mineral rights that are customarily waived
      by other lenders, as long as they do not materially alter the contour of the
      property or impair its value or usefulness for its intended purposes; variations
      between the appraisal report and the records of possession regarding the length
      of the property lines, as long as the variations do not interfere with the current
      use of the improvements and are within an acceptable range. (For front property
      lines, a 2% variation is acceptable; for all other property lines, 5% is acceptable.);
      rights of lawful parties in possession, as long as such rights do not include
      the right of ﬁrst refusal to purchase the property. (No rights of parties in
      possession, including the term of a tenant’s lease, may have a duration of more
      than two years.); minor discrepancies in the description of the area, as long
      as the lender provides a survey and aﬃrmative title insurance against all loss
      or damage resulting from the discrepancies; exceptions to Indian claims, as
      long as the lender is insured against all loss and damage from such claims.
      Title Impediment – Loans Secured by Properties with Unexpired Redemption Periods
      Certain state laws provide a “redemption period” after a foreclosure or tax
      sale has occurred, during which time the property may be reclaimed by the prior
      mortgagor or other party upon payment of all amounts owed. The length of the
      redemption period varies by state and does not expire automatically upon sale
      of the property to a Published May 6, 2026 852 new owner. Although an unexpired
      redemption period will generally be deemed to be an unacceptable title impediment,
      Fannie Mae will consider it to be acceptable provided the following requirements
      are met: ✓ Requirements for Loans Subject to Unexpired Redemption Periods The
      property must be located in a state where it is common and customary to sell
      single- family residential property during the redemption period. Note: Loans
      representing the purchase of Fannie Mae-owned properties which have been sold
      during the redemption period may be subject to separate negotiations. The mortgagee
      policy of title insurance must take speciﬁc exception to the unexpired right
      of redemption but also aﬃrmatively insure the mortgagee against all loss arising
      out of the exercise of any outstanding right of redemption, without qualiﬁcation.
      If any party exercises a right to redeem the mortgaged property, the loan must
      be paid oﬀ directly out of the redemption proceeds with no requirement for any
      further action or claim for repayment. The lender must indemnify Fannie Mae
      (as described in A2-1-03, Indemniﬁcation for Losses) for any losses incurred
      by Fannie Mae that can be directly attributed to the exercise by any party of
      a right to redeem the mortgaged property, including without limitation, a loss
      related to borrower default due to a dispute with the redeeming party over the
      terms of the redemption. Note: Fannie Mae strongly encourages lenders to provide
      written disclosure to borrowers of properties that are subject to unexpired
      redemption periods if not otherwise required by law (or disclosed by the title
      company). Recent Related Announcements The table below provides references to
      recently issued Announcements that are related to this topic. Announcements
      Issue Date Announcement SEL-2022-06 July 06, 2022 Announcement SEL-2020-07 December
      16, 2020 Announcement SEL-2019-01 February 06, 2019 Published May 6, 2026 853'
  judgment: false
