Fannie Mae Homepath Loans
One of the choices that you as a home buyer have in today's market is to purchase a home using the new Fannie Mae Homepath program. Whether you plan on living in the property as your primary residence, or you’re a real estate investor, this program has something for you, including a very favorable financing package.
What is a Homepath Property?
First, the Homepath program was developed by Fannie Mae as a unique way to market homes that have been taken back from homeowners as the result of a foreclosure.
The property has gone through the entire foreclosure process from beginning to end and possibly an auction after that, but it remains up for sale. Many of these homes are sold at values well below the market and can provide exceptional value.
Homepath Renovation Mortgages
The Homepath program does also allow for home improvement financing. You can buy the property and simultaneously borrow either 35% of the completed value or a maximum of $35,000 whichever is less. This is called the Homepath Ronovation Mortgage and properties that are eligible will have this icon in their description.
These properties vary in terms of condition, from to gorgeous move in ready condition to properties that need significant work. If you dig you will find there are some gems being marketed within the program. Factors that contribute to the physical condition of the property include how long it has been vacant and how the property was maintained by the previous owner.
Fannie Mae has made some improvements to the property in certain circumstances, look for thess icons next to the properties they have improved.
Homes, even when winterized, that have been though one or more New England winters may need more repairs than others. In any case you will want a home inspection, as properties in the program are sold AS-IS and there is more on this below. Prospective buyers may wonder what properties may be designated as a Homepath property.
The answer is simple, all properties must be designated by Fannie Mae as Homepath properties to be sold under and financed via this program. If you are interested in looking at some of these homes, a good place to start is with the Homepath website at www.Homepath.com then, your local real estate agent.
As a buyer of a primary residence, you have the ability to view and make offers on properties via their "First Look" program. This program makes properties available to you 15 days in advance of real estate investors.
Do I Deal with Fannie Mae?
Homepath properties must be listed by real estate agents, meaning that they are never sold directly to the general public without a Realtor. The more experience that your real estate agent has with short sales and foreclosures the better, as these transactions can be more complex than a traditional sale.
Financing a Homepath Property
The Homepath program offers favorable financing terms for those that can quality, and many people can. Benefits include no appraisal, which means you can save roughly $500 and no monthly mortgage insurance, which has the potential to save you hundreds of dollars per month in your mortgage payment.
Down payments will be in the 3% range for occupying broowers, and some or all of this can be in the form of a gift, from either a close relative, or certain charitable organizations.
Give us a call here at Poli Mortgage to find out exactly which organizations are able to contribute. Qualifying for a mortgage in the Homepath program is similar to qualifying for any other types of mortgage in terms of income and assets. You will need a pre-approval letter before you are able to submit an offer on a Fannie Mae Homepath property.
If you are looking at condominiums you definitely want to give us a call first to see if they are on the Fannie Me approved list. Many condo and townhomes have covenants or bylaws that are more restrictive than Fannie will permit, hence they won't lend money to borrowers purchasing homes in these condo developments.
Get a Home Inspection
There are several disclosures in the paperwork that you will sign during the process, the Homepath properties are always sold “as-is” and there is no going back to the seller with major or minor issues down the road.
Even if you were to spend a few hundred dollars for a home inspection on a property that had major issues and you were to walk away from it, you would be well ahead in the long run, as opposed to purchasing a property and subsequently were to spend thousands of dollars in repairs.
Hire an Attorney
This should go without saying, but you never want to buy any piece of real estate, especially a Homepath property without having an attorney looking at your documents. While many of these properties can go 30-45 days from start to close of the transaction, many can go longer, and you need someone on your side that keep the process moving and on track.
Fannie Mae has literally hundreds of thousands of these properties on the market at any given time, and making sure your transaction goes smoothly, is the job of your attorney. While many real estate agents are good at what they do, there will most likely be questions in the process that would best be handled by attorneys.
Real Estate Investors
The Homepath program also has opportunities for real estate investors, though in the first 15 days that a property is on the market, consideration will be given to buyers that intend to use the property as their primary residence.
How to get started:
Call Poli Mortgage Group: 866-353-POLI (7654) and one of our Mortgage Professionals can walk you through the process.