Fannie Mae is a government-sponsored enterprise (GSE) chartered by Congress with a duty to provide liquidity, stability and affordability to the U.S. housing markets now a day. It runs in the U.S. as a secondary mortgage market and not making home loans directly to consumers. It works with mortgage bankers, brokers and other primary mortgage market partners to help ensure that all of them have funds to lend to home buyers at affordable rates.
Fannie Mae has the home path program for borrowers. The HomePath program was intended for the sale of foreclosed homes owned by Fannie Mae. A HomePath mortgage can only be used to purchase one of those foreclosed homes under the said program. The loans are offered in two types which can be based on fixed-rate, adjustable-rate or interest-only terms. One of the loans is the traditional mortgage, and the other one is the renovation mortgage. These loans also allow for light renovations to a home.
The HomePath mortgage loan have low down payment and flexible mortgage terms because borrowers may choose loans with fixed-rate, adjustable-rate, or interest-only. The borrowers may qualify even if their credit is less than perfect. It is available to both owner occupiers and investors and the down payment can be funded by the borrowers own savings; a gift; a grant; or a loan from a nonprofit organization, government, state, local or employer. There is no mortgage insurance, no appraisal fees, no declining markets policy and no prepayment penalties.
For those homes that are in need of a few repairs, Fannie Mae has the HomePath renovation mortgage. The HomePath renovation mortgages can fund both for the purchase and light renovation of the borrower's home. It has low down payment and flexible mortgage terms because borrowers may choose loan plan with fixed-rate or adjustable-rate. The down payment of at least 3 percent can be funded by the borrowers own savings; a gift; a grant; or a loan from a nonprofit, state or local government, or employer. Moreover, no mortgage insurance is needed.