Fannie Mae Program to Help Buyers Purchase Homes

Fannie Mae has a program designed to help buyers purchase homes which Fannie Mae owns as a result of mortgage defaults by prior owners. The program is called the Fannie Mae HomePath program. The benefits of the program are numerous: 1). low down payment requirements 2). borrowers may qualify even if their credit is less than perfect 3). available for owner occupied homes, second homes, and investment properties 4) no mortgage insurance is required and 5).no appraisal is required in most cases.

According to Fannie Mae guidelines “Eligible properties must be owned by Fannie Mae (as a result of foreclosure or other similar actions such as deed-in-lieu of foreclosure, sold by Fannie Mae to the buyers and designated by Fannie Mae as eligible for a HomePath mortgage. Eligible properties can be found by checking the www.homepath.com website that includes details regarding the property and verifies that it is eligible for HomePath financing.

Down payment requirements vary depending on the type of occupancy. Owner occupants need as little as 5% down, which when coupled with no mortgage insurance, creates a great bargain. Second home purchasers and investors require larger down payments, but still less than normally required by Fannie Mae. And once again, mortgage insurance is not required.

Borrowers with less than perfect credit also can qualify. Depending on the borrower’s credit score, a larger down payment is required. For example, a purchaser with a credit score of 580 would normally not be eligible for a Fannie Mae loan. However, this borrower would qualify for HomePath financing as an owner-occupant, for a second home purchase, and even as an investor with a 20% down payment.

The HomePath program, in most cases, does not require an appraisal. The sales price from the purchase contract will be used for determining the property’s value for financing purposes. Due to the difficulty being currently experienced involving appraisals, this benefit will help move the transaction along in an efficient and expedient manner.

For borrowers desiring to purchase one of Fannie Mae’s eligible properties the HomePath program offers a relatively hassle-freeway to become a homeowner.