As the real estate market improves and inventory increases, some avenues to buy distressed properties may have begun to fade from our collective memory. Fannie Mae's HomePath program, first launched in 2009 as a way to help Fannie Mae market homes claimed via foreclosure, remains a great way to acquire a home.
The HomePath program lets buyers purchase Fannie Mae-owned homes with simpler mortgage requirements than with traditional financing. It serves buyers who are purchasing the foreclosed property to be their primary residence or an investment, and for homes which are generally move-in ready.
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For buyers of foreclosed homes, the Fannie Mae HomePath loan boasts several distinct advantages over other financing types such as the FHA loan or VA loan.
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Through HomePath, lenders can require as little as 5% down for buyers who are purchasing a primary residence. For investors, the minimum downpayment is a mere 10 percent. With HomePath, private mortgage insurance is not required. Other unique traits of the Home Path program include :
- Property appraisals are not required
- Lower credit scores are allowed -- even below 660
- Buyers can accept up to 6% seller concessions to offset total closing costs
Down payments on a HomePath Mortgage can come in the form of a gift from a family member; or, made via a grant or loan from a non-profit organization, state or local government, or employer.
As an added bonus to buyers, Fannie Mae offers a "First Look" marketing program to buyers who plan to buy a foreclosed home to make it their primary residence. Designed to promote homeownership and neighborhood stabilization, First Look makes properties available to primary home buyers 20 days prior to real estate investors.
First Look gives primary home buyers an opportunity to buy HomePath-eligible homes without the pressure of bidding against bona fide investors. Buyers can research HomePath eligible properties here.
If you have questions about whether buying through the HomePath program is right for you, you can send me an email at brad.toft@snmc.com or you can reach me via phone at 425-444-3177.
