Homepath: Fannie Mae's gift to investors

     I've been a bit reluctant to post about this particular topic.  I was informed shortly after I received my Real Estate license that, as a licensee, I'm no longer eligible to participate in this loan program, and thus it's been a sore subject for me.  The fact remains, though, the Fannie Mae Homepath program is a godsend for investors in a period when most banks won't even talk to us, let alone underwrite a loan for an investor property.  I'd like to take a few minutes and summarize the benefits of using this program to buy a home.

     The Homepath mortgage and Homepath Renovation Mortgage are loan programs backed by Fannie Mae as a VA or FHA loan are backed by the VA or FHA.  None of these entitys actually issue loans, they merely guarantee the money for the loan to the banks that underwrite them for the benefit of a qualifying debtor.  Fannie Mae properties, those foreclosed upon and which are now being sold by Fannie Mae, can be found on the Homepath website for just about every area in the US.  Not only are most of the homes listed here being offered at extremely great discounts, but some also qualify for Homepath financing either with a Homepath Mortgage or with a Homepath Renovation Mortgage.  For the average consumer, one can receive a great deal with terms such as (copied from the Homepath website):

• 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.

     Now, for the subject of this post, note the line that says available for primary residences, second homes and investment properties.  The investment property portion is the godsend for those of us that invest, since they will allow one to make a 10% down payment AND still provide seller concessions for closing costs for single family properties that don't require the renovation financing.  For single family properties that do require renovation financing, you can expect a 15% down payment requirement, and for any multi-family property, you can expect a 25% down payment requirement.

     Agents, whether we are working for an investor buyer or for an average consumer buyer, we are doing our clients a disservice if we're not checking this inventory for a deal for our clients with a great mortgage to go along with their new home.  Furthermore, a $1,200 bonus is available to selling agents who submit an initial offer on or after June 14, 2011, and close on the HomePath property by October 31, 2011.  Just remember, selling agents must request the agent bonus at initial offer submission in order to receive it.

    So, in summary, whether you're an investor or a first time, second time or so-on home buyer, push your agent to check this inventory for a property for you, you could end up with a better deal than you could have imagined and the loan that you receive will likely beat anything you could have found on conventional terms.  Once again, the Homepath website has tons of great information and will allow you to search their inventory.  Check it out!

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