Fannie Mae’s HomePath loans are a great way to purchase a HomePath property with very little down and no mortgage insurance nor appraisal required. HomePath loans are conventional mortgage loans. Minimum down payment for owner occupied homes is 3.5% down payment. There is no appraisal required because these homes are owned by Fannie Mae and being sold by Fannie Mae. There is no mortgage insurance required.
Fannie Mae HomePath Program
Fannie Mae launched HomePath Loans and the HomePath renovation mortage program back in 2009 in order to relieve the tens of thousands of residential homes it had in its inventory from the real estate and financial meltdown of 2008. Fannie Mae’s inventory of homes was multiplying by the tens of thousands month after month from the real estate meltdown. Fannie Mae’s inventory of homes that it repossesses through monthly foreclosures is no where near comng to an end. Inventory is still increasing month after month so the Fannie Mae’s HomePath Loans program is expected to continue in the near future. This could be opportunity to home buyers interested in purchasing foreclosed properties through Fannie Mae’s HomePath mortgage loan program.
HomePath Loans: How Does The HomePath Program Work?
Fannie Mae has an inventory of Fannie Mae properties. Fannie Mae is not a direct lender to consumers on HomePath Loans. Fannie Mae created HomePath Loans lending guidelines for HomePath Loans mortgage lenders if these mortgage lenders want Fannie Mae to buy back the HomePath Loans they originate. Fannie Mae’s down payment requirements are 3% down payment for owner occupied homes and 10% down payment for second and investment properties.
Since Fannie Mae’s HomePath real estate program are foreclosed properties owned by Fannie Mae, these properties are not in the best of condition. Therefore, Fannie Mae’s HomePath program also offers aquisition and renovations loans where HomePath property buyers needing repairs can benefit from the HomePath renovation mortgage loan program. The mortgage loan can be up to 97% loan to value of the finished project: Market value after repairs.
HomePath Loans: Qualifications
Mortgage loan borrowers who are interested in HomePath Loans must qualify for the program. HomePath Loans are conventional loans so conventional mortgage lending guidelines apply. Minimum credit scores of 660 FICO is required. Minimum down payment for owner occupied homes are 3.5%. For second homes and investment properties, minimum down payment are 10%. Debt to income ratios are as follows; 31% front end debt to income ratio, 43% back end debt to income ratio. Potential HomePath home buyers can visit the 100,000 plus homes that is available by Fannie Mae by visiting the Fannie Mae’s HomePath’s website at www.HomePath.com .
HomePath Loans: Advantages Of Purchasing HomePath Properties
The first 15 days any HomePath properties come out in the market, only owner occupied home buyers can qualify to put offers. After 15 days, then investors can participate in the bidding process.
There is no appraisal required for HomePath loans. You do not have to get HomePath loans to purchase a HomePath property. You can purchase a Fannie Mae’s HomePath property with a FHA loan or regular conventional loan or even cash.
Benefits Of HomePath Loans
Another big advantage about HomePath Loans is that it does not require mortgage insurance even with a 3% down payment. HomePath loans have higher mortgage rates than regular conventional loans. Mortgage rates are about 0.50% higher than market conventional mortgage rates. However, with the no mortgage insurance requirement, your monthly mortgage payment will be lower with the higher mortgage rate.
2015 Update On HomePath Loans
Fannie Mae has discontinued the Fannie Mae HomePath Loan Program in 2014. Fannie Mae HomePath will continue HomePath properties but will not be offering the Fannie Mae HomePath mortgage loan program. HomePath property buyers can use other loan programs such as FHA, VA, and Conventional Loans to purchase Fannie Mae HomePath Properties.