You have had to see the Fannie Mae HomePath eligible signs if you are out looking for real estate. In this article, we will discuss what these are and any need to know information that is critical if you want to save time and money when making an offer.
1. Can you explain what Fannie Mae HomePath is?
Fannie Mae owns thousands of properties via foreclosure, or some version of it, that they are trying to sell. The HomePath program is designed to help sell these homes, since most of them have some kind of damage that would prevent them from being financed in a traditional manner. Fannie Mae wants to sell these quickly, so they will price them very competitively, while offering financing to help get them off their books.
2. Can we finance the repairs?
As with most foreclosures, repairs are a part of the transaction. Fannie Mae will not do any repairs they don't feel will enhance the marketability, they expect you to do them. Plan on being the one responsible to handle all repairs.
What makes this program great, is that Fannie Mae HomePath will allow you to finance the repairs. You still pay for them, but they are wrapped into your loan, and you can close prior to the repairs being started or completed.
3. Can an investor use HomePath?
Even investors can use this program, making this program stand out above FHA's 203k. The required down payment is larger, but it is available. Alternate programs require you to be an owner occupied property, thereby excluding investors.
4. Is there catch?
Here is a list of some of the specific points to look for. This list is not comprehensive, but it will get you started.
- The advertisements for Fannie Mae HomePath properties claim they will pay 3.5% in closing cost credits. This will only happen if it is written in the earnest money agreement, so don't assume it is yours without asking.
- A pre-qualification letter is required to get an offer accepted. Talk to you lender and have one ready to submit with your offer.
- Contingent offers are not accepted. So eliminate the contingencies prior to making an offer.
- All properties are sold as is. Make sure you know what you are getting into before you buy the home.
This has been just some of the basics to get you started on knowing more about the Fannie Mae HomePath Properties. If the property is not owned by Fannie Mae, consider using the FHA 203k program. It might be the right fit on a different property.