HomePath Renovation Loans: Credit Score Requirements
Fannie Mae HomePath Renovation Loans offer home buyers of Fannie Mae owned properties the ability to purchase a home and make renovations to the property after settlement. Fannie Mae loan programs, including the HomePath and HomePath Renovation Loans, have higher credit score requirements than a comparable FHA Loan. The HomePath Renovation loan program allows for a renovation budget to be created, while the HomePath Loan allows for the property to be purchased outright without any improvements to the property.
In order to qualify for the lowest down payment requirement, which is 3% down, using HomePath Renovation financing all applicants must have a minimum 660 credit score. Borrowers with a credit score between 620 and 659 will require a 20% down payment. Applicants with a credit score of 619 and less will not quality for a HomePath Renovation Loan.
In addition the HomePath Renovation borrower must receive a "DU - Approve Eligible" from Fannie Mae's automated underwriting engine. While borrowers receiving a "DU - EA1 Eligible" finding will still qualify for the HomePath and Home Renovation Loan, they will find that a comparable FHA and FHA Renovation Loan will offer better terms.
The HomePath Renovation is available for investors purchases. The investor must put down 25% and have a minimum credit score of 700.
For HomePath Renovation borrowers with a down payment of less than 5% and credit scores under 700 will need to compare their loan options with a comparable FHA loan program. Often the terms of the FHA loan program, which has more flexible credit approval parameters, will offer a more attractive financing solution than the HomePath and HomePath Renovation loan. However, if the purchase is to be used an investment property, which FHA doesn't allow, then HomePath Renovation will be the ideal strategy.
If the anticipated repair budget is to exceed $35,000 there are other financing solutions such as a traditional FHA 203k loan or the HomeStyle loan program through Fannie Mae. HomeStyle is a much overlooked program but does require attention for well qualified home buyers with an equity position in their property.
Perspective home buyers should know their middle credit score after making a loan application with a Lender. If the credit scores are slightly below a minimum threshold the Lender should review the options available to improve the borrowers credit scores.
To learn more about your financing options through the HomePath and HomePath Renovation Loan Programs or if you want to qualify for a HomePath Renovation Loan you can contact HomePath-Renovation.com at (866) 351-3229. To get started on your loan application right now complete a secure encrypted online application in order to receive your loan pre-qualification within the next four business hours.