HomePath Mortgage: What is a HomePath Mortgage?

If you are considering purchasing a home or refinancing—you can go to quickenloans.com or lendingtree.com along with local mortgage lenders in your area—to determine what loan will best suit you—and your family.  You can compare closing costs, APR's and Par rates to determine what loan will best serve your—and your family's long-term interests.

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Homepath Mortgages

A HomePath Mortgage is basically financing that is offered only on Fannie Mae-owned properties. The property was previously owned by a homeowner and the homeowner lost the property through foreclosure and the property was owned or invested in by Fannie Mae.

The benefits of HomePath financing is that the loan offers a low down payment, no mortgage insurance, no lender requested appraisal, and expanded seller contributions—among other options.

The "HomePath Mortgage" is available on move-in ready properties and the "HomePath Renovation Mortgage" is available if you purchase a Fannie-Mae property that needs renovating and with the renovation loan (loans would be combined) you would have just one loan.

The property can be purchased by owner/occupants or investors!

With a HomePath property you also have the option of choosing any lender, such as your local bank, credit union or other mortgage or financial institution. As with any home purchase—cash is always an option.

A "HomePath Renovation Mortgage" allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation — up to 35% of the as completed value, no more than $35,000.

The HomePath Renovation Mortgage is available for owner occupants and investors.

HomePath "Mortgage Loans" have the following characteristics:

* A HomePath Mortgage allows a borrower to purchase a Fannie Mae-owned property with a low down payment, flexible mortgage terms, no lender-requested appraisal and no mortgage insurance. Expanded seller contributions to closing costs are allowed.

Benefits to You, the Borrower:

• Low down payment and flexible mortgage terms (fixed–rate, adjustable rate, or interest–only).

• Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.

• No lender-requested appraisal.

• No mortgage insurance; ask your lender for cost details on loans without mortgage insurance.

• Expanded seller contributions for closing costs allowed.

• Available for primary residences, second homes and investment properties.

• Many condo project requirements are waived; ask your lender for details.

• For more information, contact a HomePath Mortgage lender or click here for the Home Buyers Guide. 

HomePath "Renovation Loans" have the following characteristics:

A HomePath Renovation Mortgage allows a borrower to purchase a property that requires light to moderate renovation.

The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000.

Benefits to You, the Borrower

• Low down payment and flexible mortgage terms (fixed- rate or adjustable-rate).

• Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.

• Renovation amount based on appraisal “as completed” value.

• No mortgage insurance; ask your lender for cost details on loans without mortgage insurance.

• Expanded seller contributions for closing costs allowed.

• Available for primary residences, second homes, and investment properties.

• Many condo project requirements are waived; ask your lender for details.

For more information about the renovation process, contact a HomePath Renovation Mortgage lender.

Note: Potential buyers (you) should always use the lender and financing product that best meets the needs of the buyer (you) and property, and you should always consider requesting a home inspection of the property.

Be sure to ask your lender for cost details for loans with no mortgage insurance.

What Is The "First Look" Marketing Period All About?

Fannie Mae's innovative "First Look" marketing period was created to promote home ownership and contribute to neighborhood stabilization — allowing home buyers to bid and purchase foreclosed properties before they are made available to investors.

Details include:

• First Look is typically the first 15 days a property is listed on HomePath.com (Nevada is 30 days).

• Only owner occupants (buyers who will occupy the home as their primary residence), some non-profits, and public entities and their partners can submit offers and purchase properties.

• Properties in the First Look period have a countdown clock on the property details page, displaying the days remaining to purchase.

• Investor offers submitted after the First Look period expires will be considered along with all other offers. Ask a Fannie Mae listing broker for more details.

If you are concerned that the First Look marketing period is not being handled appropriately on a particular property, contact the Fannie Mae Resource Center immediately at 1-800-732-6643.

Down Payment Assistance Programs Can Be Used In Conjunction With A HomePath Mortgage

Many state and local housing authorities offer financing programs that can assist you with the down payment and purchase of your new home. Additionally, HUD's Neighborhood Stabilization Program (NSP) provides home buyer funds through special financing programs.

Fannie Mae supports public funding programs—and offer additional assistance to the buyer, including the following:

• Earnest money requirement for individuals using public funds is only $500. Fannie Mae waives the earnest money requirement for public entities using public funds to purchase a Fannie Mae- owned property.

• Once an offer using NSP funds is accepted, buyers have the opportunity to renegotiate after receiving an NSP required Uniform Residential Appraisal value for the property.

• The standard closing period for a public funds offer is 45 days, which allows time to fulfill the NSP requirements for funding.

• Buyers using public funds to purchase a home can do so without competition from investors during the First Look marketing period (typically the first 15 days on the market).

Key Points You should Know About HomePath & Fannie Mae

Fannie Mae works with mortgage servicers, housing counselors and other partners to help homeowners prevent and avoid foreclosure.

Through KnowYourOptions.com and the Fannie Mae Mortgage Help Centers, Fannie Mae offers assistance directly to homeowners so they can understand their options to avoid foreclosure.

However, sometimes foreclosure is unavoidable. When foreclosures occur on mortgages in which Fannie Mae is the owner/investor, their goal is to sell properties in a timely manner in order to minimize the impact on the community.

HomePath is the branding used for all Fannie Mae-owned properties — anytime you see something labeled "HomePath", it has to do with the sale of Fannie Mae-owned properties.

For example, HomePath.com is their website, where home buyers (you) and real estate professionals can get detailed information on their listings, and HomePath Mortgage offers buyer financing products for those properties.

HomePath.com includes only those properties owned by Fannie Mae. Foreclosed properties can represent a great opportunity for first-time buyers, move-up buyers, those looking for a second or vacation home or those looking for an investment opportunity.

There is a wide selection of homes in neighborhoods across the country — from single-family homes to condominiums and town houses.

Keep in mind, the number, type and sales price of homes may vary substantially by market as well as the condition of the home. Many are move-in ready, while some may require light repairs or more extensive renovations.

To learn more about Homepath and Fannie Mae go to the link above—you can view the Buyer's Guide or listen to a podcast series on Fannie Mae.

You can learn much more about the, HomePath mortgage and other real estate industry information.

If you are a current owner of a Fannie Mae property and you find yourself in a difficult financial situation—you can go to KnowYourOptions.com—Fannie Mae's Consumer Web Site to educate yourself about your options to avoid foreclosure and otherwise get help.

If you suspect fraudulent activity of a Fannie Mae property you should report possible fraud directly to Fannie Mae at:

MortgageFraud_Tips@FannieMae.com.

You may also call their Fraud Tips Hotline at 1-800-7FANNIE (1-800-732-6643) to report possible fraud or if you have other concerns relating to a Fannie Mae-owned property.

VERY IMPORTANT

What is different about purchasing a Fannie Mae property through the HomePath program is that, when you buy a home, you usually deal with a seller who does not live in the home.

Fannie Mae has acquired HomePath properties through foreclosure, deed-in-lieu of foreclosure, or forfeiture.

When buying a Fannie Mae-owned home, you should know the condition of the property, the cost of any needed repairs, and the steps in the loan qualification and closing process “before” you enter into a purchase and sales agreement.

In most cases Fannie Mae may will make some repairs to increase the home's marketability, but other repairs may be needed.

Fannie Mae sells each property in "as is" condition, which means that the buyer accepts the property "as is." Fannie Mae is not responsible for fixing any problems after settlement.

Keep in mind, even if the house has fresh paint, brand new carpet, new appliances, perhaps even a new roof or siding, it doesn't mean everything in the house is new, or even works.

Fannie Mae does not warrant or guarantee any work that may have been done on the property, whether as part of its efforts to sell the home or pursuant to conditions in the purchase contract. Where a home warranty is available, you may wish to buy it at your own expense.

You should also consider hiring a qualified professional to inspect the property, whether it has been repaired or not. Hiring a home inspector is a highly recommended practice, no matter what type of home you buy.

You can view the Buyer's Guide to learn more information about buying a Fannie Mae-owned home.

From working with a real estate professional to financing to how to make an offer, the guide covers what you need to know when purchasing a HomePath property. You can access the Buyer's Guide by clicking here. 

If Fannie Mae knows of any hazards on properties that they own or market, they disclose this information through their real estate listing agents. However, they may not have been informed by the previous owner of all hazards.

Fannie Mae encourages you to have the property inspected by a professional before you buy.

Fannie Mae uses a state-specific real estate purchase contract and a real estate purchase addendum for their properties.

If there is anything in the document you don't understand or aren't comfortable with, you may want to contact a real estate attorney, the real estate sales professional who listed the property, or any real estate professional of your choice to review these documents with you.

You don’t have to use a Closing (Escrow) or Settlement company that Fannie Mae chooses. You may designate the title, settlement, or escrow company of your choice, subject to the terms of the contract.

Keep in mind, Fannie Mae “will not” accept offers contingent on the sale of your current home. Other types of contingencies will be considered on a case-by-case basis.

Fannie Mae does not require a pre-qualification statement or letter before negotiating an offer.

However, by obtaining this statement or letter, you better position yourself to get financing and complete the sales transaction in a timely manner.

Pre-qualification allows you to see how much house you can afford and the mortgage amount you may be able to qualify for before you make an offer on a home. It also helps you focus on homes in an affordable price range.

Even though, Fannie Mae does not require this letter—you want to be in position to not waste your time or the time of other parties involved in the purchase process—therefore make it a point to get pre-qualified at a minimum up-front.

A loan pre-qualification doesn't mean your loan is approved. You must apply for a loan separately, after you are pre-qualified and your purchase offer is accepted.

You may obtain a loan pre-qualification or a loan pre-approval at the lender of your choice.

To take advantage of their special financing, they encourage you to work with a HomePath-approved lender.

Special financing that was discussed above are available on many properties through HomePath Mortgage and HomePath Renovation Mortgage.

To purchase a Fannie Mae property you must utilize a real estate agent.

Fannie Mae depends on the expertise of local real estate sales professionals and accepts offers only through their real estate listing agents.

You may work with any real estate sales professional to submit an offer to the real estate agent who has listed the property.

If multiple offers are received by Fannie Mae—all interested parties may be asked to submit their best offer in writing through the listing agent by a specified date and time.

Fannie-Mae may accept or provide a counteroffer that they determine to be in their best interest. Fannie Mae is not obligated to accept any offer submitted.

The information above may seem overwhelming, however if you choose an agent who is familiar with the process and is looking out for your best interest—the process can go fairly smooth.

Be sure the agent that you choose uses an "Offer Submission Worksheet" that includes the "check-list" of all of the requirements that must be done to successfully present the offer contract. 

About This Article:

 

The above article was written by Thomas (TJ) Underwood.   Thomas (TJ) Underwood is an active real estate broker in the state of Georgia and is the writer behind The Wealth Increaser, Home Buyer 411,  Home Seller 411, The 3 Step Structured Approach to Managing Your Finances, Managing & Improving Your Credit & Finances for this MILLENNIUM and CREDIT & FINANCE IMPROVEMENT MADE EASY—FREE GUIDE. 

He is the creator of TheWealthIncreaser.com where he regularly blogs about helping consumers improve their credit, finance and real estate pursuits in an intelligent, consistent and proactive manner.  He’s always looking for ways to make intelligent finance improvement happen for those who “sincerely desire” success in their future. 

You can contact him from a number of sources but the most direct way is to contact him through the contact us block that can be found at the bottom of this page. 

You can also get other highly relevant tips on "living your life more abundantly" and possibly earn revenue at the same time by linking to TheWealthIncreaser.com.

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