The Fannie Mae HomePath Loans used to be one of the best loans out there, until Fannie Mae announced that the mortgage program was to be discontinued as of October 7, 2014.
Fannie Mae HomePath Loan is a mortgage program that allows a borrower to purchase a Fannie Mae-owned property with a low down payment, flexible mortgage terms, no lender-requested appraisal and no mortgage insurance.
The Fannie Mae HomePath mortgage requires a minimum down payment of 3% (versus 3.5% required for an FHA loan) and 10% down for investors or second-home buyers.
Anyone can apply for HomePath mortgage. You don’t have to be a first-time home buyer. Investors and seond-home buyers are allowed too. Remember these are foreclosed homes owned by Fannie Mae. Basically, these are the same a bank-owned or REO properties. Fannie Mae just want to get rid of them fast and get their cash back.
By providing their own mortgage, Fannie Mae made it easier for people to qualify for a mortgage and sell their properties faster.
Because Fannie Mae HomePath homes are technically foreclosures, many do need some TLC. Fannie Mae also offered the HomePath Renovation Loan in Hawaii for borrowers to purchase properties that require little to adequate renovations.
Both the purchase and renovation amount are wrapped into one single loan. The maximum loan amount for moderate renovation is up to $35,000 in repairs or up to 35% of the after rehab value.
Benefits of Honolulu Fannie Mae HomePath Mortgage
• Lower down payment with flexible mortgage terms. 3% down payment is required and the source of funding can come from a gift, a grant, or nonprofit organization; 10% down payment for second homes or investment properties.
• No mortgage insurance is required in most cases and HomePath Loans allow flexible mortgage terms, including; fixed-rate, ARMs, or the interest only payment feature.
• You can use Fannie Mae HomePath loans to purchase a primary residence, investment property, or a second home.
• No appraisal required. Fannie Mae usually allows up to 97% financing available for primary residences and up to 90% for Second Homes and Investment Properties.
• You can buy 1-4 unit properties. And options are available for borrowers who have more than 10 financed properties. Great choice for real estate investors.
• Both the purchase loan and renovation loan are wrapped into one easy loan.
I think Fannie Mae HomePath Loan is a perfect loan available given all the benefits listed above. Unfortunately, it is no longer available.
However, you can still buy discounted HomePath Homes in Honolulu. Click here for available HomePath Homes.