Fannie Mae announced a new HomePath Ready Buyer program.
For qualifying first-time homebuyers to receive up to three percent of the purchase price in closing cost assistance toward the purchase of a HomePath property upon completion of an online homebuyer education course.
Fannie Mae HomePath homes are a small number of Fannie Mae foreclosed properties, which can be found a www.HomePath.com
On a $150,000 home for example, this could result in up to $4,500 in savings for the buyer.
In addition, Fannie Mae will reimburse the $75 cost of the homebuyer education course at the time of closing.
All Home Loans Have Closing Costs
There are a lot of people involved in the home buying process, and all of them charge for their services: Lenders, appraisers, title companies, credit reports, state taxes, and more.
As the buyer, you ALWAYS have to pay the closing costs. You can pay them in four different ways:
- Cash out of pocket
- Rolled into the Loan amount (known as seller paid closing costs - although the seller really isn't paying anything. It is just the term used to add it to your loan amount versus an out of pocket expense)
- Rolled into a higher interest rate (the higher rate is used to lower the up-front costs, but you pay more over time)
- Any combination of the first three options
Fannie Mae Paying Closing Costs Sound pretty good... but...
You must also realize that getting the seller to contribute 3% towards the buyers closing costs happens on just about all home purchases. To me it seems like a teaser by Fannie Mae to get people to focus on their foreclosured properties, with no real benefit over any other property you might like. This is even stranger to me because Fannie Mae already would pay 3% towards the buyers closing costs, just like any other purchase.
Bottom line: Don't overly focus on a Fannie Mae HomePath property simply because of this HomePath Ready Offer, but if you find a HomePath property, be sure to get the 3% seller paid closing costs.
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Joe Metzler is a Senior Mortgage Loan Officer for Minnesota based Mortgages Unlimited. He was named the 2014 Minnesota Loan Officer of the Year, and provides Home Mortgage Loans in MN, WI, and SD. He can be reached at (651) 552-3681
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