A New Path To Home Ownership Using Fannie’s HomePath Program

Real Estate Agent with Four Season Sotheby's International Realty

There were 957 homes for sale at an average asking price of $552,033 in the towns listed in this Lakes Region real estate market report as of March 1, 2010. That is slightly lower than the 993 homes available last March which had an average price of $583,496. The current level of inventory represents a 12 month supply of homes on the market.

It’s no secret that mortgage giant Fannie Mae has got problems. Right now, who doesn’t? Not only does she have a name you can make fun of, she has foreclosed on so many properties that she, like all other lending institutions, needs to lose some weight. To encourage buyers to purchase her foreclosed properties, she is offering a mortgage program that might be just the ticket for you if you’re in the market for a new home. The HomePath program enables buyers to obtain a Fannie Mae-owned foreclosed property with down payments as low 3% (10% on investment properties), flexible mortgage terms, no PMI, up to 9% in seller contributions depending on the type of property and occupancy and, believe it or not, no appraisal! This program is available for primary residences, second homes, and investment properties with interest rates comparable to a conventional loan.

Buyers still have to qualify for this program (imagine that!) and their interest rate and down payment requirement depends on, like all other loans, what their credit score, income, and debt ratios are. Buyers with less than stellar credit may also qualify but with a higher down payment and interest rates. But this still could be a good way for them to go when you figure in the other benefits of the program. A buyer’s down payment can also come from a gift, a grant, or loan from a nonprofit organization, state or local government, or even their employer.

Fannie Mae also puts selected homes into a program called First Look which gives buyers who intend their purchase to be a primary residence a chance to bid on the home without competing with bids from investors. This First Look period lasts for 15 days for the buyers that intend to occupy the property. After 15 days they will accept bids from investors to be considered along with any others. There is even a program that provides additional funding for any light renovation which needs to be done.

In our market, the HomePath program could also be very advantageous for anyone that finds a Fannie Mae owned condo. A standard conventional loan for a condo generally requires 20% down and if you apply for an FHA loan, the condo association must be approved by FHA and the criteria can be very tough to meet. The HomePath program offers the lower down payment and does not require the association to be FHA approved.

 In order to find out which properties are available for the HomePath program, you can go to www.homepath.com where you will also find all the details about the program as well as a buyer’s guide for Fannie Mae owned properties, and a list of approved lenders for the program in your area. The last time I looked, there were about twenty properties in Belknap County on the HomePath website. Check them out, you might find something you like!

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Roy Sanborn

Lakes Region of New Hampshire
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