If you’re curious to learn about Fannie Mae’s special Homepath loan product I have put together a quick summary of the program. If you haven’t heard of the HomePath mortgage product it is a program put together by Fannie Mae to help unload some of the homes they have taken possession of through foreclosure. It has a few nice features to make it easier for homebuyers to buy the homes. Here are the pro’s and con’s of the program as I see them:
Pro’s
- Allows for a minimum of 3% down payment (although the closing costs are much higher compared to a 5% down payment)
- Allows the seller to pay all of the buyer’s closing costs
- No mortgage insurance even with less than 20% down payment (however, the interest rates are higher)
- No appraisal needed as a part of the underwriting process
Con’s
- The property must qualify as a HomePath eligible home. Only Fannie Mae foreclosed homes are included in this list so the supply of homes are limited. You can search homes HERE.
- Rates are about .50%-.75% higher than standard conventional mortgages
Other
- HomePath also offers a renovation loan similar to the FHA 203K product (you can read more about FHA 203K HERE).
Depending on the buyer’s financial qualifications a standard conventional mortgage can often be a better option. If you’d like to evaluate your options please contact me today!