This is the 5th installment of the Loan Program Quick Reference Guide and today I am focusing on the HomePath loan. Monday I gave you the rundown on the standard FHA loan. Tuesday it was the VA. Wednesday I highlighted conventional loans and yesterday the spotlight was on the FHA 203(k) Streamline loan. The HomePath is a good loan but it is very limited since it can only be used on FNMA-owned homes that are designated for the HomePath. Here are the highlights:
HomePath Mortgage allows a borrower to purchase a Fannie Mae-owned property with a low down payment, flexible mortgage terms, no lender-requested appraisal and no mortgage insurance. Expanded seller contributions to closing costs are allowed.
Benefits to Buyer
· Low down payment and flexible mortgage terms (fixed–rate, adjustable rate, or interest–only-Primary Residence).
· Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.
· No lender-requested appraisal.
· No mortgage insurance.
· Expanded seller contributions for closing costs allowed.
· Many condo project requirements are waived.
· 10% down payment requirement for 2nd Home and Investment properties!