Taking a trip to the Fannie Mae website at Homepath.com yields a map and search application to locate foreclosure homes in the Fannie Mae inventory that have a special lending opportunity. These homes have been pre-approved for the HomePath program that allows a buyer who is planning on living in the home to purchase it and finance repairs and rehabilitation costs into the mortgage.
The following are basics points to the Fannie Mae HomePath program:
- Financing to fund both your purchase and light renovation
- Low down payment and flexible mortgage terms (fixed or adjustable rate)
- Down payment (at least 3 percent) can be funded by your own savings, a gift, a grant or a loan from a nonprofit, state or local government or employer
- No Mortgage Insurance
Fannie Mae's inventory of foreclosed homes has been growing rapidly. It's difficult to move that many homes to investors or cash buyers, and lenders want a "livable home." When previous owners strip out everything from appliances to flooring and even walls, the home is hardly livable. Regular buyers couldn't purchase these homes, even if the cost to rehab them would still make them a great buy. The buyer couldn't rehab before ownership, and Fannie Mae didn't want to take on that task either.
In the case of a home approved for this loan program, the buyer can get all of the repair and renovation work bid by licensed contractors. These costs and their influence on value at completion are factored into the appraised value. If the price and other terms fit into a decent loan-to-value ratio, the work can be done and financed into the mortgage.
You can contact me directly to become approved under the Fannie Mae HomePath financing: