Good afternoon all: I hope you had a nice weekend! I just finished sitting through a seminar on Fannie Mae Homepath Renovation Loans. This is another great loan product available that you should know about. Here are the details:
1) The program is designed for REO's (bank-owned) owned by Fannie Mae which need renovation.
2) It is a purchase combined with renovation where the customer will be making full payments during the construction period. This obviously is different than a construction loan where the payments are typically interest only on the balance during the construction period. The difference is that some Fannie Mae owned properties can only financed with the Fannie Mae Homepath Renovation Loan. For a list of these properties go to www.homepath.com and follow the steps.
3) This is an owner-occupied only program and renovations can only be 20% of the purchase price or $30,000 maximum. It applies to 1-4 units and manufactured housing and condo's are exempt.
4) As with anything a minimum credit score of 620 and a maximum loan-to-value of 97% is the norm.
5) There is an appliance incentive of up to 3.5% although that is due to expire at the end of June at this point.
6) Owner/builder projects are not allowed. You must choose a builder who can be approved.
These are just some of the highlights of this great program. With the preponderance of foreclosures, etc. on the market these days, I think this is a great way for either yourself or your clients (if you are a realtor) to buy a property that may need to be fixed up due to neglect. As with other loan programs, there are several options as to terms and rate.
I feel fortunate to be one of the very few lenders approved for this program. I think it's also a great way to buy and fix up real estate so it's livable now. If you have any more questions or comments about the Fannie Mae Homepath Renovation Loan Program feel free to
Have a great day!
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