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Fannie Mae offers sweet financing if you buy one of their bank owned homes!

By Erin Newington

Real Estate Agent with 5305573559 CA 01700374

February 10, 2009 09:07 AM

Has Fannie Mae pulled their head out of their... sand box?

What if I told you Fannie Mae is offering special financing if you buy one of their bank owned homes? Would you believe me? Well you should because it is true!

Why does this benefit you? Well frankly... the terms of their offered financing is pretty darn sweet!

sold sign The benefits of their HomePath program include:

Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
You may qualify even if your credit is less than perfect
Available to both owner occupiers and investors
Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
No mortgage insurance
No appraisal fees
FREE home warranty is included with the purchase.

I recently wrote a blog about another local Sacramento Agency that is offering a similar incentive if you buy one of their bank owned homes. Read the blog now >>

BUT the catch is they only have 2 or so homes available in the Sacramento Area to purchase.

Here is the best part about this program... There are over 250 homes available in the Sacramento area right now that qualify for this program!

Here are some other homes available in the Sacramento Area:

Elk Grove... 46 homes available!
Citrus Heights... 21 homes available
Rancho Cordova... 16 homes available!
Fair Oaks... 4 homes available
Carnichael... 14 homes available!
and so on...

Here is some more specific information about their guidelines:

97% (3% down) for owner occupied financing with NO MORTGAGE INSURANCE!

Why is this such a big deal?
A typical FHA loan with an equivalent down payment (3.5% down) would require 1.75% of the loan amount to be paid upfront for a mortgage insurance premium. Then on top of your monthly payment (PITI), you would be charged .55% (of the loan amount) every year for ongoing mortgage insurance.

Let me break this down so I don't throw too much loan lingo your way.. Here is an example mortgage insurance fees for an FHA loan of $200,000...

$200,000 x 1.75 = $3500 You would be charged this amount at closing or you could roll this into a loan on a traditional FHA loan program for the upfront mortgage insurance premium.

$200,000 x .55 / 12 months = $91.67 This means $91.67 would be added to your payment every month for mortgage insurance.

With this special financing offered by Fannie Mae you could put .5% LESS down than a FHA loan and you do no pay ANY MORTGAGE INSURANCE! This really is a sweet deal!

Do you feel like a little more sugar today? Wait until you see what they will do for an investor!

90% (10% down) for non owner occupied properties with NO MORTGAGE INSURANCE!
If you are looking for an investment home in Sacramento, you know that you will get a better return on your investment if you have less money in the deal. Right now with typical financing (actually offered by Fannie Mae for non-Fannie Mae owned homes), you should expect to put down at least 25%.

Wow! So for example if you purchased a home for $150,000 (not owned by Fannie Mae), you would need to put down $37,500 plus closing costs. If you buy a home owned by Fannie Mae, you only have to put $15,000 plus closing costs. If that does not help you"sharpen your pencil" I am not sure what will! This is a really big deal!

They even offer a renovation program that allows you to finance light renovations upfront and add it to the loan amount. So if you find a Sacramento Fannie Mae owned home that maybe has some vandalism issues (which many do), you can probably get a discount for the home and finance in the repairs that are needed to bring it back to livable condition!

It is so nice to be able to report some good news to folks. It really has been a drag having to shovel through the bad news to try and find something good to report as far as guideline changes go!

Here is a link to search for homes in your area >>

We can offer this special loan program... so just give us a call and we can discuss this opportunity further!

Happy Hunting!

This blog by:

Team Newington
Sacramento Mortgage Planners
(916) 687-6868
www.SuperiorLoanTeam.com

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Tanya Venable

Orlando, FL

SEO, Mobile SEO, and Internet Marketing Consultant

Thanks for sharing! This is great information to keep updated on.

Feb 11, 2009 08:38 AM

Barbara Dougher

Coldwell Banker United East Texas Division - Tyler, TX

Realtor - 2008 Rookie of the Year

NOt a whole lot in my area...but that's okay....good news! I have booked mark the link and will be checking it out!

Feb 11, 2009 09:09 AM

John Alesi

Century 21 Award - Mission Viejo, CA

(Orange County California Real Estate)

I get this list emailed weekly (I think). You have given me motivation to dig a little deeper into it and find some gems.

Feb 11, 2009 09:16 AM

Tamara Perlman

Referral Network Inc. - Truckee, CA

Checked out the Home Path website and it's very interesting! Saw a couple of places I'd consider buying!

Feb 11, 2009 09:40 AM

Sarah Rummage

Benchmark Realty LLC, Nashville TN 615.516.5233 - Nashville, TN

Love Being Realtor® in the Nashville TN Area!

Great information. I saw some nice homes in our area, and am going to pass the information along to my potential buyers. Thanks!

Feb 11, 2009 10:05 AM

Bob Willis

Berkshire Hathaway HomeServices California Properties - Orange, CA

Orange County & L.A. County Real Estate Agent

Thank you for providing this information and the link. There weren't many in my areas, but I'm hoping to find one for one of my buyers soon.

Feb 11, 2009 10:20 AM

Donne Knudsen

Los Angeles & Ventura Counties in CA - Simi Valley, CA

CalState Realty Services

Team Newington - When I first got wind of this program last week, I ran the numbers and scenarios for a few of my FHA buyers and for my buyers, FHA is still the better option. The main problem I have in putting my FHA clients in this product is that right now FHA rates are much better than the rates for HomePath and even with an FHA 3.5% dp and the FHA MI and UFMIP (financed), FHA was still more affordable for my clients.

However, the biggest advantage of this program will be to the investor, providing of course, there are suitable Fannie Mae properties to purchase. When I checked available properties in Ventura County (SoCA) there weren't a whole lot of available properties and approx 60% of them were concentrated in one specific area.

However, for the investor looking for a deal (who will be a big part of reducing the inventory of REO's in my market), this will be a good product for them.

Feb 11, 2009 10:38 AM

Anonymous

Dave Weaver

Wait a minute. Isn't special or creative financing what got us into this real estate crisis in the first place? What about the 12 million households who own more than their homes are worth? These families can't sell without writing a huge check or a short sale, they can't refinance because of low appraise values. This program is only helping the bank get real estate off their books. It KILLS the local market with low appraisals for everyone else.

WAKE UP REALTORS!!! This is just a repackaging of the same programs that have devistated your market for the last two years. Why do you think home prices are continuing to decline?

What are you thinking?

Feb 11, 2009 01:26 PM

#47

Ann Hayden 636-399-7544

Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri - Des Peres, MO

SelectAnn.com

Thanks for the heads up... I am going to see what is available here.

Ann Hayden in soggy Wildwood, Missouri

Feb 11, 2009 02:53 PM

Mike Henderson

Your complete source for buying HUD homes - Littleton, CO

HUD Home Hub - 303-949-5848

A very fascinating program. Looks like there is a ton in my area.

Feb 11, 2009 03:12 PM

Danell Merren

Providence Home Mortgage/ICCF - Grand Rapids, MI

I read about this yesterday, but my concern is trying to help the buyer keep straight the incentives with HUD, Fannie Mae, etc. It's so specific to these foreclosure types. Yes, another option, and that is good though.

Feb 11, 2009 10:35 PM

Wez Barber

Bluesky Group - International, IT

Great News, though maybe not so much for me as a non American investor. Certainly will be following this one though as more areas open up with similar deals.

Feb 11, 2009 10:41 PM

Anonymous

Thanks I will look into this right away

Feb 11, 2009 11:19 PM

#52

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

Thanks ..Team, I was able to link to the available listings site and start the process as a vendor from the site you included in the blog. hope to be able to offer Brokerage services soon..again Thanks

Feb 12, 2009 12:47 AM

Barbara Delaney

Park Place REALTORS, Inc. - Roanoke, VA

Dear Team,

Fantastic info! Thanks so much for your explanation and a link!

I found 3 homes in my area. One was already under contract.

Barbara

Feb 12, 2009 10:58 AM

Kelsey Barklow

Hurd Realty - Johnson City, TN

423/948-9154

Thanks for this info. Great to know.

Feb 12, 2009 12:16 PM

Erin Newington

5305573559 - Grass Valley, CA

Sierra Foothills Realtor

Donnee: I agree with you. Right now.. it really is more of a benefit to an Investor. Did you know even if your Borrower does not use this financing , they can still get the free home warranty?

Feb 13, 2009 11:19 AM

Erin Newington

5305573559 - Grass Valley, CA

Sierra Foothills Realtor

Dave: I understand your frustration but I have to disagree with you. Loans are so much different these days. We got into this mess because it was a free-for-all and you only needed a pulse to qualify. Income is being verified along with assets so the Borrower really needs to be solid in order to get into a loan. I do see your point that they are breaking the rules to benefit themselves though. Thanks for your opinion.

Feb 13, 2009 11:23 AM

Donne Knudsen

Los Angeles & Ventura Counties in CA - Simi Valley, CA

CalState Realty Services

Team Newington - thx for the reminder. I think I did read that somewhere in my package of stuff I have on the program.

Feb 14, 2009 01:44 AM

Beth Thoma Robinson

Hawaii Life Real Estate Brokers Big Island - Hawi, HI

R(B) SFR - Hawaii Island Luxury Resort Real Estate

I just ran across this program on a condo I showed at Mauna Lani Resort on the Big Island of Hawaii. A pretty amazing deal considering that lenders today want 25-30% down on resort properties.

Mar 11, 2009 08:04 PM