HomePath Renovation Mortgages – What Are They and Why Should I Care?
If you are housing hunting you are no doubt seeing HomePath properties everywhere. What the heck are they and why should you care?
HomePath properties are foreclosures held by Fannie Mae that previously had a Fannie Mae loan on them.
With a glut of inventory and lack of available financing vehicles, Fannie Mae was faced with a MAJOR problem and needed to find a way to move these properties FAST!
The HomePath Mortgage was born. What is a HomePath Loan and why should you care?
HomePath Mortgage Loans come in two forms; HomePath and HomePath Renovation. What’s the difference?
Traditional HomePath Mortgages are purchase loans available ONLY on Fannie Mae foreclosures. You’ll need a 660 credit score or better to qualify. They come in various down payment ranges starting at a LOW 3% down. You can also do 5% down, 10% down or more. The more down payment the LOWER the INTEREST RATE.
They are available to Owner Occupants, 2nd Home Buyers AND INVESTORS. For the latter, the minimum down payment is 10%.
HomePath Loans do NOT have mortgage insurance which saves you money. With that said, Fannie Mae does adjust the interest rate up to offset for the lack of the mortgage insurance.
However, even with the slightly higher interest rate you will typically save on your payment when compared to a lower rate FHA loan.
HomePath Renovation Mortgage
HomePath Renovation Mortgages carry many of the same qualities of it’s non-renovation sister. There are a few BIG differences though
They will allow for the buyer to FINANCE into the loan as much as$35,000 of repair and renovation. You’ll still have only ONE LOAN and ONE CLOSING and the repairs will take place after the mortgage closes.
The scope of the work must be cosmetic in nature. You will not be able to do structural improvements. Kitchens, Baths, Flooring, Paint, Appliance, Windows, Energy Efficient Improvements plus MUCH more are considered allowable repairs.
Like the traditional HomePath Loan, theyare also available to Owner Occupants, 2nd Home Buyers and Investors. Investors are required to put at least 15% down. HomePath Renovation Loans do NOT have MORTGAGE INSURANCE.
Unliketradition HomePath Loans, they DO require an appraisal. However, like the FHA 203K the appraisal is based on AFTER REPAIR VALUE.
Theyare verysimilarto the FHA 203K Streamline in other ways as well. The scope of work allowed is almost exactly the same. The way the renovation draws disburse after your loan closes is very similar as well.
You can expect 50% of the funds in the renovation escrow account to come within 5-7 business days after your loan closes. The remainder of the funds will be disbursed once all the work is completed and inspected.
Fannie Mae properties present excellent value. Priced to sell and available with special financing options they shoulddefinitely be something to consider if you are in the market for a home!
Already found your property? Ready to move forward? Complete the quick form on the right and one of our Specialist will contactimmediatelyand can have you a pre-approval with 24 hours.
These properties go FAST! Don’t miss your window, be READY with your PRE-APPROVAL!