source:
  type: guide
  id: fnma-sel-b2-1.5-03
  authority: Fannie Mae Selling Guide B2-1.5-03 — Legal Requirements
  description: Fannie Mae Selling Guide B2-1.5-03 — Legal Requirements.
  coverage_tier: operative
obligations:
- id: fnma-sel-b2-1.5-03-full
  canonical_id: fnma-sel-b2-1.5-03-full
  section: Fannie Mae Selling Guide B2-1.5-03 — Legal Requirements
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B2-1.5-03 — Legal Requirements
    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: 'B2-1.5-03, Legal Requirements (06/03/2020) Introduction This
      topic contains information on legal requirements, including: First Mortgage
      Lien Position Published May 6, 2026 219 Personal Property Rental Property Leases
      Mortgages with a Capitalization Option Mortgages Permitting Open-end Advances
      First Mortgage Lien Position If the mortgage being delivered to Fannie Mae is
      a ﬁrst mortgage, the lien of the security instrument must be a ﬁrst and paramount
      lien on the borrower’s estate in the real property. Personal Property Personal
      property may not be included as additional security for any mortgage on a one-unit
      property unless otherwise speciﬁed by Fannie Mae. For example, certain personal
      property is pledged when the Multistate Rider and Addenda ( Form 3170) is used.
      Rental Property Leases Leases that predate the mortgage could have a superior
      claim to the mortgage. Furthermore, state laws may diﬀer on the relationship
      between an unrecorded lease and a subsequent mortgage. The lender is responsible
      for ensuring clear title and ﬁrst lien enforceability in accordance with A2-2-07,
      Life-of-Loan Representations and Warranties Mortgages with a Capitalization
      Option Some mortgage instruments permit the note holder to capitalize delinquent
      interest or sums advanced to pay insurance premiums, property taxes, or other
      expenses required to protect the value of the security property by adding them
      to the outstanding principal balance of the mortgage. Fannie Mae will not purchase
      or securitize mortgages where any such funds have been capitalized or advanced
      by the note holder prior to delivery to Fannie Mae. Mortgages Permitting Open-end
      Advances Fannie Mae purchases or securitizes a mortgage that includes an open-end
      advance provision only if the provision gives Fannie Mae the option not to make
      any advances. If funds were advanced prior to delivery, the transaction is considered
      a modiﬁed mortgage that is not eligible for delivery. See B2-1.5-02, Loan Eligibility.
      Recent Related Announcements The table below provides references to recently
      issued Announcements that are related to this topic. Published May 6, 2026 220
      Announcements Issue Date Announcement SEL-2020-03 June 03, 2020'
  judgment: false
