Many potential first-time homeowners are interested in the properties owned by Fannie Mae. The majority of the homes available via the HomePath program are priced attractively and typically at prices more favorable than comparable properties. The availability of the Fannie Mae HomePath program can make home ownership a reality for a lot more prospective home buyers.
What is this program?
The homes listed for sale via Fannie Mae are those that have been acquired through a deed-in-lieu of foreclosure or foreclosed. Any property of this nature is referred to by the term “HomePath property”.
The properties that Fannie Mae has for sale are put on the market at favorable prices to help minimize the impact foreclosures can have on the local community. This program is able to list all types of properties, including:
Two unit homes
The general condition of the home’s interior can differ with no actual guarantee given to the all-round appearance. Certain properties will require a lot of renovations or extensive repair work, while others are ready for someone to move in instantly. The all-round quality of a home should be carefully considered when looking at this type of home via the HomePath program.
Should I consider the HomePath program?
The Fannie Mae properties are likely to appeal to a certain area of the home market. In most cases, they will be more appealing to the first-time home buyer or anyone that wishes to make the home their main place of residence.
A standard aspect of the plan is the First Look policy. This essentially means that the program is open for the first 15-20 days to families or individuals that solely intend to use the property on an owner-occupant basis.
The First Look aspect of the program will significantly increase the ability for the first-time home buyer to find a home without too much competition. It helps to let communities and neighborhoods thrive even at times when some people are experiencing financial hardships and foreclosures.
Investing in a HomePath home is a great way to save a lot of money on the initial purchase of a property. The very attractive market value placed on these properties helps to achieve the faster sales and hopefully minimize the negative impact that many foreclosures can have on a local community.
A useful thing to consider is whether or not you are in a position to complete any renovation work or repairs that may be necessary when investing in this type of property.
On occasion, Fannie Mae can take the step of making certain alterations to increase the market value or simply make it more habitable. However, there is no guarantee that other defects will not appear at a later period in time. Even with new appliances in place or parts of the home receiving a new coat of paint, there still may be issues with the property. However, anything that has been identified as a fault will likely be advised to the potential buyers via the listing agent.
For complete peace of mind it may benefit to have a final home inspection completed, which has the ability to highlight the issues related to health or safety. Any report must be completed before the settlement is complete. After this time, Fannie Mae is no longer responsible for any issues noted on the property.
Applying for the right home loan
A great option to finance the home purchase is via the HomeReady mortgage. Similar to any other type of home loan it is first necessary to comply with the qualifying criteria.
Are you a likely candidate?
The preferred candidate for the HomeReady mortgage is the low to moderate income family or individual. The mortgages aren’t just for the first time buyer, they are also a useful option for those that have owned in the past or still have an existing home. The entry requirements for this type of financing are quite wide and anyone is free to apply for a loan.
This type of mortgage is even a viable option for the prospective buyers that aren’t in a position to offer a decent down payment. In fact, the HomeReady mortgage is created to help those that don’t have a high amount of savings.
A typical down payment can be in the region of 3%. If the home buyer does not have this amount saved up, they do have the option of having the down payment gifted to them from a family member or friend. All in all, there are no real financial issues that can stop a home buyer from meeting the qualifications to invest in a HomePath home.
How do you qualify for this home loan?
The process of getting qualified for the HomeReady mortgage is relatively straightforward. There are certain criteria that must be met before the financing is agreed.
A useful step to improve the search for a new home is to organize a prequalification letter via one of the Fannie Mae approved lenders. They can range from a small mortgage broker to a major financial institution. Once the prequalification letter is approved, you will have complete peace of mind in knowing you are eligible and ready to start searching for the family home.
What is the preferred credit score?
The HomeReady mortgage isn’t an option for the home buyers with a poor credit rating. Fanny Mae prefers to accept the families and individuals with the more favorable credit history. The qualifying mark to get approved is at least 620. But, it can still benefit to have a more polished score of 680 or more if you wish to be granted the best rate of interest for the loan duration.
How do you apply?
In order to apply for the HomeReady mortgage it is necessary to get in touch with any approved lender. However, this isn’t a heavily advertised type of home loan program, so a little research time may be needed.