Updated April 6th, 2017
What is the Fannie Mae HomePath Program
The Fannie Mae Homepath program was created in 2009 as a way to offer home buyers the chance to buy foreclosed homes. Before the program was created, investors were able to buy the foreclosed properties before any home buyer had a chance to see it.
The Standard Homepath Program is now the Ready Buyer™ HomePath Program
The ReadyBuyer HomePath program is for first time homebuyers and investors. It requires a downpayment of 3%, and 3% is given back to you in the form of closing costs by completing the training program. The training program costs $75 and is done online, after you complete the training you will receive a certificate to turn in with your contact to receive 3% back for closing costs.
Benefits of the Fannie Mae ReadyBuyer™ HomePath Program:
- Credit scores of 640 and higher may qualify
- 3% cash back to use towards closing costs
- 5% down payment
- No PMI required
- Home appraisal not required
- C0-op and Condo approvals can be waived in some cases
- Fixed rate and adjustable mortgage terms available
- Investors can use the loan on up to 20 properties
ReadyBuyer™ HomePath Requirements
- 5% downpayment
- 640 minimum credit score required.
- Stable employment (2 years with current employer)
- Proof of income
- W2’s and Tax returns
- No more than 1 late payment in the past 12 months.
- HomePath Buyer Education Course
- Must have a real estate agent or broker
- Only HUD homes from the HomePath website are eligible
To qualify for a Mortgage a lender must check your credit scores, and review your credit report for any derogatory items. Verify income using your W2’s, paycheck stubs, bank statements and tax returns; Properties must be Fannie Mae HomePath eligible. A knowledgable real estate agent can help you to locate participating properties. If you are not working with a real estate agent, we can refer you to a local agent to assist you.
No mortgage insurance!
One of the biggest advantages of a Fannie Mae HomePath loan is that PMI, private mortgage insurance, is not required. With MIP being 0.85% for FHA loans, which is $850 per $100,000, this is a huge discount.
Because HomePath loans do not require MIP they are one of the cheapest types of mortgages available.
An FHA home loan is a great option because the downpayment needed is just 3.5%. FHA loans have less strict credit score requirements too, you can qualify for FHA loans with a 580 credit score. You won’t get 3% back for closing costs but the seller is allowed to pay up to 6% of the purchase price towards your closing costs, you can try to negotiate that in.
If you’re looking for a renovation loan then a 203k loan is a perfect option. If the property needs minor repairs then a streamline 203k loan will give you up to $35,000 to make repairs or upgrades. For a home that needs major repairs then a standard 203k will give you the cash to make the needed repairs.
Standard Homepath mortgage program (discontinued)
The standard program is strictly for home buyers looking to purchase a move in ready foreclosed home that they will occupy as their primary residence. Investors can not use the standard Home path program.
Renovation Homepath mortgage program (discontinued)
The renovation program is used for a home path property that needs some major repairs before it is inhabitable. You can receive 35% of the after repaired value of the home to $35,000. Renovation Homepath mortgages are available to investors and traditional home buyers, they require a small downpayment and no private mortgage insurance is required.
If you would like to discuss your loan options with a qualified mortgage lender, please complete the form to compare loan offers.