Because of the housing market crash, Fannie Mae created a program called the HomePath mortgage loan program. HomePath mortgage loans have helped aid and clear the large amounts of homes that went into foreclosure during the hard times when people were losing their homes. Fannie Mae created this program to drive demand for home buyers to purchase this extra inventory. In addition, because this program was designed to clear the homes in foreclosure, the requirements are very simple. Requirements include a minimal down payment of 5%, no mortgage insurance, and no appraisal. These move-in ready homes can be purchased as either a primary residence or secondary investment properties.
One of the most trying and irritating obstacles for home buyers attempting to buy a foreclosed home is that most lenders will not approve the loan because either the home will not pass inspection or requires to many repairs. Fannie Mae has an option for these kinds of obstacles. The HomePath program can offer a renovation loan that can cover 97% of the home’s estimated post-repair value.
As described above, there are many advantages to using the Fannie Mae HomePath program, however, for every advantage there may be a disadvantage. Interest rates are typically higher on these foreclosed homes because insurance is not required. If buying a foreclosed home and fixing it up interests you, then the HomePath program can be one of the best options for you. Our Horizon Lending family can help you today to qualify for the HomePath mortgage loan and can get you into the home of your dreams or aid in helping add to your investment properties.