Many buyers have sought out foreclosed homes for their typical below market value sales price. A foreclosed home is a residence where the homeowner failed to make their payment and the lender has seized the property. When a home has been foreclosed by Fannie Mae, they offer those homes for sale under their brand name of Homepath. Homepath financing has some great options not offered with other loan types. Investors are also able to purchase investment properties with a Homepath mortgage. This conventional loan is being used to hopefully stabilize the housing market and allow for incentives to encourage the home purchase market. Read on for a few of the perks of a Homepath mortgage.
One of the things that make Homepath great is that there is no required appraisal. Fannie Mae has already appraised the property and the sales price is usually set below the current market value. It will actually hinder your transaction if you get an appraisal on your own. Also no appraisal means a reduction in your closing costs.
Low Down Payment
As with many conventional mortgages, a Homepath home is able to be purchased with just a 5 percent minimum down payment. Of course, a larger down payment can be made, but it’s not necessary. Investors may be able to purchase investment property with only 15 percent down.
No Monthly Mortgage Insurance
Another perk is that Homepath has no required monthly mortgage insurance. While the interest rates are a bit higher than average rates, the savings in the mortgage insurance makes up for it. One of my last customers saved over $100 in their monthly payment by not paying the monthly mortgage insurance on their Homepath loan.
If negotiated, Fannie Mae will pay up to 6% of a buyers closing costs on a primary residence. For an investment property up to 2% paid closing costs for an investment property, if negotiated.
Fannie Mae offers a “First Look” time frame. First Look is typically the first 20 days a property is listed on HomePath.com (Nevada is 30 days). Properties in the First Look period have a countdown clock on the property information page of HomePath.com displaying the days remaining to purchase. Eligible buyers during First Look are owner occupants*, public entities and their partners, and some non profits.
A borrower qualifies for a Homepath loan just as they normally would for any other conventional loan. Homepath financing can be used to purchase a primary residence, a second home, or investment property. Look for the available homes on the website at www.homepath.com. Although not required, Fannie Mae highly encourages borrowers to get pre-approved before making an offer. To apply for a loan, please fill out the loan application and start your homeownership process today!