Fannie Mae Home Path and Fannie Mae Home Path Renovation
Fannie Mae Home Path and Fannie Mae Home Path Renovation
Fannie Mae created a clever way to sell a lot of those foreclosures that she inherited ever since the mortgage meltdown . They made a great program with terms favorable to borrowers without the need for an appraisal and mortgage insurance and added lots of seller paid incentives which limit the borrowers out of pocket expense.
In my opinion the greatest benefit of this program is the low down payment requirements and no appraisal. Just like FHA, the program allows for 6% seller paid closing costs when financing over 75% loan to value. Under 75% it allows for 9% selling paid closing costs that can cover closing costs as well as prepaid expenses which are your escrows. Typically , with FHA for example,when there is a lot of seller paid costs this puts pressure on the appraisal. Buyer and seller probably agreed on a price, then seller paid costs were added and a higher appraisal is needed to allow the transaction to take place. With Fannie Mae Home Path, there is no appraisal as long as FannieMae allows the price. This allows the mortgage banker (me) to structure your financing to really limit the out of pocket expense required.
Benefits to You, the Borrower
Low down payment 3% and flexible mortgage terms (fixed–rate, adjustable rate, or interest–only).
Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.
No lender-requested appraisal. (The price is determined by Fannie Mae)
No mortgage insurance; ask your lender for cost details on loans without mortgage insurance. The rate is a little higher compared to FHA, but having no mortgage insurance really lowers the monthly payment.
Expanded seller contributions for closing costs allowed. (6% to 9%)
Available for primary residences, second homes and investment properties.
Many condo project requirements are waived; ask your lender for details.
Minimum credit score 660 for a single family residence, 620 for 2-4 unit property
For starters to use this program the preoprty you are considering purchasing must me a Fannie Mae owned property. Go to http://www.homepath.com to see what is currently for sale.
This program is also a great alternative for condominiums. FHA typically does not finance condos in Florida. Fannie Mae HomePath will allow the borrower to purchase a low rise condo as long as it is on the list. If the condominium you are looking at is not on the list I do have regular Fannie Mae alternatives at 90% and even 95% as long as the association is established , there are ample reserves and it is a warrantable condo. e.g (Not too high of a percentage of investors ) See: Buy a Condo Florida
And it Get's Even Better!
HomePath Renovation Mortgage allows a borrower to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000.
Benefits to You, the Borrower
Low down payment and flexible mortgage terms (fixed- rate or adjustable-rate).
Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.
Renovation amount based on appraisal “as completed” value.
No mortgage insurance; ask your lender for cost details on loans without mortgage insurance.
Expanded seller contributions for closing costs allowed.
Available for primary residences, second homes, and investment properties.
Many condo project requirements are waived; ask your lender for details.
When considering this program it is important to work with a buyers agent who is familiar with the program. In Palm Beach County I recommend Austin Lovvorn over at Realty Elite USA in Wellington, Florida. He is well versed with all of the features of this program and monitors the inventory of homes that qualify on a daily basis.
