Fannie Mae Homepath is a special home buying program which offers discount priced foreclosure homes that can be purchased with special financing options. This government sponsored program is becoming popular amongst individual buyers with less than perfect credit and those who are unable to provide a large down payment. It is also favored by real estate investors.
Fannie Mae Homepath properties consist of houses that were either repossessed by Fannie Mae or surrendered by the homeowner using deed in lieu of foreclosure. Deed in lieu is a special option offered through bank loss mitigation which allows borrowers to return their home to avoid foreclosure.
Properties purchased through the Fannie Mae program can be financed using Home Path Mortgage. Finance options include traditional mortgage loans and renovation loans which include additional funds for required repairs. Properties in need of repair are marked with a Home Path Renovation Mortgage logo, while homes in good condition are marked with a Home Path Mortgage logo; allowing visitors to easily identify which type of mortgage they will require to buy the home.
It is not uncommon for foreclosure homes to require repairs. When borrowers are struggling to meet loan obligations they typically cannot afford expensive repairs. When borrowers lose their home to foreclosure they sometimes inflict damage on the property. As a real estate investor, I have witnessed houses that have been ripped apart by distraught property owners.
When banks repossess houses they normally do not engage in repair work unless the home requires immediate attention to prevent further deterioration of the property. When banks do make repairs the work and materials are not covered under warranty or guarantees. Foreclosure real estate is always sold in ‘as-is’ condition, so buyers must conduct due diligence to determine the actual cost of the property.
Using Home Path Mortgage to finance Fannie Mae foreclosure homes requiring substantial repair can be a good option. Most lenders require buyers to take out construction loans to make repairs or renovations. This type of loan is assessed a higher interest rate than mortgage loans. Once repairs are made, borrowers refinance into a traditional home loan. This can add a significant amount to the cost of the property.
In addition to the special finance options and low down payment requirement, many Fannie Mae Homepath properties are eligible for Neighborhood Stabilization Program grants offered through HUD. NSP grant money must be used to rehabilitate houses or vacant land in neighborhoods with high rates of foreclosure. NSP grants are available to qualified buyers. Individuals can obtain one NSP grant, while real estate investors can obtain up to five grants.
Unless purchasing Fannie Mae Homepath properties with cash, buyers must obtain prequalified financing prior to submitting a purchase offer. Many properties are priced well below market value, so buyers often compete with several other buyers. Therefore, it is smart to submit your highest offer upfront.
There is still speculation surrounding whether the real estate market has bottomed out or if prices will continue to decline. A recent article published at MSN Real Estate states, “Waiting for the absolute bottom to hit before buying puts you at risk of missing it and getting caught up in a market on the upswing. Plus, for some first-time home buyers, owning simply makes better economic sense than renting.” Only you can decide if now is the time to invest in a home. If you’re ready to take the plunge you owe it to yourself to investigate Fannie Mae Homepath.
Fannie Mae Homepath
Neighborhood Stabilization Program Resource Exchange
MSN Real Estate: “Should You Wait for the Housing Market Bottom?”