Homepath Loan: Fannie Mae To Contribute 3.5% Closing Costs
Fannie Mae’s HomePath loan program will offer to pay up to 3.5% of the purchase price towards the buyer’s closing costs. This phenomenal HomePath loan program where Fannie Mae pays 3.5% is only available now through March 31, 2014.
Fannie Mae HomePath Loan Program
Fannie Mae has its own inventory of foreclosed homes where HomePath home buyers can only put down a 3% down payment for owner occupied homes and 10% down payment for second homes and investment homes. HomePath loan programs are conventional loan programs and conventional mortgage lending guidelines apply.
Minimum Credit Score Requirements
HomePath loan borrowers need a minimum of a 660 credit score to qualify and their debt to income ratios are capped at 31/43: 31% front end debt to income ratio and 43% back end debt to income ratio. HomePath loans generally have higher mortgage rates than traditional conventional mortgage loans. There is no mortgage insurance required with HomePath mortgage loans. There is no appraisal required on HomePath loan programs since the property is owned by Fannie Mae. Fannie Mae knows the value of their inventory and that is the reason why there are no appraisal requirement.
How Can I Participate In Fannie Mae’s HomePath Loan 3.5% Closing Costs Assistance Program?
To participate in Fannie Mae’s HomePath Loan 3.5% closing cost assistance program, the home buyer needs to make a purchase offer on a Fannie Mae HomePath property between February 14, 2014 and no later than March 31, 2014. The Fannie Mae HomePath property must be in an active First Look period. These First Look properties will be labeled with a First Look logo on Fannie Mae’s HomePath website: www.HomePath.com. The real estate purchase must close no later than May 31, 2014. This program is only available for owner occupied residences only and not available for second and investment properties.
Fannie Mae’s 3.5% closing costs assistance program is only for closing costs credits and cannot be applied towards down payment. In the event if there is left over closing costs credits, the balance cannot go to the home buyer and goes back to Fannie Mae. In the event if you have excess closing cost credits, you can use it towards buying your mortgage rates down.
Fannie Mae’s 3.5% closing costs assistance is similar to a sellers concession towards a buyer’s closing costs.