Many of the distressed homes you will find on my weekly distressed property list are Fannie Mae Distressed Properties. That means that Fannie Mae guaranteed the loan originally, the home foreclosed and now they are selling it. Many of the Fannie Mae properties qualify for the Home Path Finance program and offer special incentives for the buyer. Until June 30, 2011, Fannie Mae is offering 3.5% in closing costs to home buyers that use the HomePath finance program. Here is a link to the Fannie Mae site for additional information:
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 You, the Borrower
- Low down payment and flexible mortgage terms (fixed-rate, adjustable rate, or interest-only).
- 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; ask your lender for cost details on loans without mortgage insurance.
- Expanded seller contributions for closing costs allowed.
- Available for primary residences, second homes and investment properties.
- Many condo project requirements are waived; ask your lender for details.
- For more information, contact a HomePath Mortgage lender or click here for the Home Buyers Guide.
This is a great program with many benefits to the buyer but you must be under contract by May 15th at the latest if you are considering this program to give the lender enough time to close the loan. You can also use the HomePath Renovation Loan for homes that need to be fixed up first to qualify for a loan.
HOW DO YOU KNOW IF IT QUALIFIES? Most of the listing agents will put this in the remarks section of their listings, but not all of them. Ask your buyer’s agent to search for homes that may qualify and they can give you a list.