Fannie Mae’s unique HomePath foreclosure program offers extremely lenient financing terms to the purchasers of foreclosures owned by Fannie Mae.
Fannie Mae’s unique HomePath foreclosure program offers extremely lenient financing terms to the purchasers of foreclosures owned by Fannie Mae. These properties are advantageous for many reasons, including special financing, a streamlined loan process, and properties that are in far better condition than standard foreclosures.
HomePath offers two types of financing: the HomePath mortgage, and the HomePath renovation mortgage. With a HomePath mortgage, the buyer’s down payment can be as low as 3% down, and unlike other low down payment loans no mortgage insurance is required. The HomePath mortgage is available for homebuyers and investors alike, though an investor will require a higher down payment. Obtaining a HomePath mortgage can also be a faster process than a traditional loan because it does not require a property appraisal. A HomePath renovation mortgage is similar to a standard HomePath mortgage, but can also include an amount set aside for renovations.
A HomePath foreclosure generally goes through a basic renovation process before being listed, to make the home more attractive to buyers. This leaves a HomePath foreclosure in better conditions than many other foreclosures, which can be left in an extremely poor state by evicted tenants or foreclosed upon owners. By contrast, a HomePath property is ensured to be in move-in condition.
Despite all of its benefits, the HomePath program is not known or used by all real estate agents, and it may take proactive behavior by a buyer to follow up on the HomePath program, and to locate a desirable HomePath property. Not all agents may be aware of the sizable concessions that may be available on a HomePath property. Since these concessions need to be requested, this oversight can cost a buyer a not insignificant amount of money.
A HomePath mortgage is not available through all banks, but only through specific banks that have been selected by Fannie Mae. Even so, loan officers are not always familiar with HomePath Mortgage loans, as in some areas they can be quite rare. This again can complicate the process, as your loan officer might not be aware of specific requirements of the HomePath loans. As a consequence, your loan process may be delayed.
If a homebuyer purchases a property as a primary residence, they are required to move into the residence within the next 60 days and to maintain residence there for at least one year. The flip side to this requirement is that offers from owner occupants take priority over offers from investors.
Purchasing a HomePath foreclosure can be extremely beneficial to homebuyers and investors alike, but requires research, knowledge and determination. Due to its lack of mortgage insurance, a HomePath foreclosure may be the best possible option for a homebuyer with limited funds for a down payment. If at all possible, it is extremely valuable to work with both a real estate agent and a loan officer that has prior experience with the Fannie Mae HomePath process.
Pacific Northwest Realty Group has experienced Real Estate Brokers that know and understand the process. If you're interested in a Fannie Mae HomePath Property please contact one our our REALTORS today, we can show you any property listed. For a complete list of available properties please visit Fannie Mae's HomePath Website.