Fannie Mae HomePath
Fannie Mae, or the Federal National Mortgage Association, was first chartered in 1938 as a government-sponsored enterprise, the main goal of which was to help individuals in lower-to-middle-income families make their way onto the property ladder. This was so successful that Fannie Mae became a privately traded company in 1968 and, since then, they’ve gone on to offer what’s known as Fannie Mae HomePath properties, a mortgage loan program that cuts out the ‘middleman’ process of purchasing foreclosed homes. Here, we’re going to consider what exactly Fannie Mae HomePath properties are and whether they’re the right mortgage solution for you.
What are Fannie Mae HomePath properties?
HomePath properties are simply properties owned by Fannie Mae as a result of foreclosure. As such, there’s an incredibly varied range of properties on offer, and the best way to determine what’s available in your area is to simply head to the HomePath website and type in your area code. Properties that you can most often expect to find include –
- Single-family homes
- And more
In some cases, these properties may need repairs, though many are considered ready-to-move-in, and Fannie Mae will make basic repairs to ensure a property is habitable.
How does Fannie Mae HomePath work?
When homeowners voluntarily give up ownership of their home to mortgage companies, or when those properties are seized in place of payments, Fannie Mae acquires them, sometimes carries out remedial work, and then lists them on a portal called ‘HomePath.’ Like most other real estate portals, this website provides filterable listings of typically affordable foreclosed properties, including details and images. If buyers find a property they like, they work with a real estate agent to arrange viewings and make an offer, though HomePath will only accept offers made by Fannie Mae-approved realtors.
Given that Fannie Mae aims to fill these properties fast with homeowners who intend to use them as a main residence, Fannie Mae HomePath properties are typically more affordable than much of the real estate sold on the market, and additional financial assistance (which we’ll discuss in more detail later,) alongside down payments as low as 3%, make this an especially tempting option for the likes of first-time buyers or any buyer on a low income.
Financing options are with Fannie Mae HomePath properties
There’s nothing to stop buyers purchasing Fannie Mae HomePath properties with a conventional mortgage but, as touched on briefly, there are a range of home financing options for individuals wishing to purchase Fannie Mae HomePath properties but struggling to find mortgage acceptance. Notably, two programs can help to enable the purchase of Fannie Mae HomePath properties, and they are –
1. HomeReady mortgage program – Ideal for first-time buyers, low-income families, or those with limited down payments among others, HomeReady mortgage programs offer flexible funding and down payments for as little as 3% for buyers who complete a Framework Homeownership course.
2. HomePath ready buyer program – In association with Framework, HomePath also offers up to 3% closing cost assistance if at least one member of the household successfully completes the HomePath ready buyer course. Though not a mortgage in itself, this financing option can greatly help to offset the costs of a mortgage lender quote.
The Pros and What To Know About Fannie Mae HomePath Properties
There are pros and cons to purchasing Fannie Mae HomePath properties, and these are worth considering before committing to a mortgage that doesn't suit.
Pros include –
- Affordable properties
- Opportunities for mortgage assistance
- The chance for non-residents to co-sign as guarantors
- Suitable for even individuals with low credit
- And more
Cons include What To Know –
- Properties typically sold ‘as is’
- No contingent offers
- Potentially limited options
- The need to purchase through a real estate agent
How to get a Fannie Mae HomePath property
If you do find a Fannie Mae HomePath property that suits, it’s important to note that the buying process does vary slightly from the traditional market. Notably, while you will still need to go ahead and find out how to get a mortgage quote, you will also need to take preliminary steps as you seek this quote, such as –
- Get a mortgage quote
- Getting a preapproval letter from a mortgage lender
- Finding a Fannie Mae-approved real estate agent
- Finding a HomePath property in your area/price range
- Completing the buyer education course
- Submitting your offer