HomePath Financing for Fannie Mae REOs

Local Mortgage Lender Explaining Homepath Financing

A HomePath Mortgage allows a borrower to purchase a Fannie Mae-owned property with a Low Down Payment, Flexible Mortgage Terms, No Appraisal and No Mortgage insurance.  Since I am one of the few lenders in the area that can offer this program, I have been getting more calls lately asking about HomePath financing.  You can even use the Homepath Renovation loan to finance renovations to a property that you would like to buy and make repairs to.

Since I’ve personally noticed a significant increase in questions about this financing I thought I would cover the basics.  First, there are two types: a HomePath Mortgage and a HomePath Renovation Mortgage.  The difference being, the HomePath Renovation Mortgage will allow minor fixes to the property.

HomePath Mortgage:

• Minimum 3% down for primary residence

• 10% down investment property

• Borrower can own up to 10 financed properties (but need 25% down if they   own more than 4)

• NO APPRAISAL NEEDED

• NO MORTGAGE INSURANCE

• Seller contributions can be 6-9% on primary residence (the larger the down payment, the larger the allowable contribution), only 2% on investment property

Homepath Renovation:

• This will allow for light renovations to the property that can be included into the loan.

• An appraisal is done “subject to” the completion of the repairs. The value will typically be the appraised value or the cost of the house plus renovations, whichever is lower.

• The down payment is based on this value (hence, most of the renovation work gets financed into the loan).

• The loan closes and the repairs are completed by a licensed contractor within a specified amount of time

• There is more involved with these types of loans, such as: bids, inspections, draw schedules, etc.

This loan does price with a higher rate than your average 30 year fixed conforming loan, but keep in mind, there is no mortgage insurance.

Same basic underwriting requirements of a conforming loan, but without the property issues (appliances missing – no problem)

Overall, the HomePath Mortgage is a great loan.  If you are “handy” and can do most of the work yourself, you may consider the HomePath Mortgage.

If you are looking for a Fannie Mae REO property that would be eligible for this program go to www.HomePath.com.

If you have questions about this feel free to give me a call.

 

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