What Is A Fannie Mae HomePath Property And How Can You Buy One?
Whether you’re a first-time home buyer or someone who’s purchased a few homes in your lifetime, having a good selection of properties to choose from can make all the difference in helping to find your dream home. That’s where HomePath by Fannie Mae comes in.
Fannie Mae, a government-sponsored enterprise that buys mortgages from lenders, sells properties it owns in the HomePath market – which it launched in 2009 – with the goal of supporting neighborhood stabilization and helping families find the perfect home.
Keep reading to learn more about Fannie Mae HomePath properties and whether buying one is the right choice for you.
What Is The Fannie Mae HomePath Program?
Fannie Mae is a government-sponsored enterprise that provides liquidity and stability to the housing market by purchasing mortgages from lenders and selling them in the open market. When a homeowner is having trouble making their mortgage payments, Fannie Mae works with them to understand their options and avoid foreclosure. Unfortunately, that sometimes isn’t possible, which is where the HomePath Program comes into play.
HomePath is a real estate platform where Fannie Mae marks and sells the homes it acquires through foreclosure. Fannie Mae HomePath properties include a wide selection of properties, including single-family homes, multifamily houses and condominiums. Fannie Mae works to transfer these properties to new owners in a timely manner to provide stability to the neighborhood and minimize community impact.
Purchasing a home through HomePath comes with plenty of benefits, including the ability to start the purchasing process with just one click. Buying through HomePath gives borrowers access to a Fannie Mae HomeReady Mortgage, which is available to first-time home buyers and supports sustainable homeownership.
Buyers can also take advantage of the HomePath Ready Buyer Program, an online education course that allows them to receive up to 3% in closing cost assistance.
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What Is A Fannie Mae HomePath Property?
A Fannie Mae HomePath property is a piece of real estate that has been obtained by foreclosure or a deed in lieu foreclosure. Buyers can purchase a HomePath house from Fannie Mae with as little as a 3% down payment and receive a closing cost credit as large as 3% of the purchase price if they use the HomeReady loan program.
Pros And Cons Of Buying A Fannie Mae HomePath Property
Fannie Mae’s HomePath Program provides many benefits to borrowers. However, as with any investment, there will be risks involved as well. Let’s take a look at the pros and cons of this program.
Here are some of the advantages of the HomePath Program:
- Home prices are typically more affordable.
- Homes are typically in better condition than standard foreclosures.
- There are lower down payment requirements for borrowers.
Here are some of the disadvantages of the HomePath Program:
- Homes may require expensive repairs.
- The property is sold as-is, meaning you’re unable to negotiate the purchase price to account for necessary repairs.
- HomePath homes may not be available in your desired neighborhood.
How Do You Qualify For A Fannie Mae HomePath Property?
Fannie Mae offers HomeReady Mortgages to the buyers of HomePath homes. This enhanced lending product is affordable and flexible and provides invaluable homeownership education to buyers. Additionally, these loans can help buyers with below-average credit obtain mortgages. But these loans aren’t available to everyone.
To qualify for a Fannie Mae HomePath loan, you must not have owned a house for the last 3 years. You’re also required to use the HomePath property as your primary residence within 60 days after closing.
HomeReady loans are specifically designed for borrowers who meet the following characteristics:
- Low income
- Limited cash for a down payment
- A credit score of at least 620 (with the best pricing for credit scores above 680)
- A maximum debt-to-income ratio (DTI) of 36%
- Supplemental boarder or rental income
How To Buy A Fannie Mae HomePath Property
The process of buying a home can feel overwhelming for first-time buyers, which most HomePath borrowers are. Researching and familiarizing yourself with the steps upfront can make the process go a bit more smoothly. Below are the steps to buying a FannieMae HomePath property.
1. Find An Approved Real Estate Agent
Finding the right real estate agent can make or break your home buying process. To buy a HomePath property, you’ll need a licensed real estate professional by your side.
2. Get Preapproved With A Lender
Whether you’re financing your home through a Fannie Mae HomeReady Mortgage or through a different lender, it’s important that you get preapproval before touring homes and submitting any offers. Preapproval can help you learn how much you’ll be approved for, help you lock in a fair interest rate and strengthen your offer.
3. Look For HomePath Properties
Once you’ve been preapproved, you can start browsing properties online at HomePath.com. The website is easy to navigate – simply enter the city or ZIP code where you want to search. You can save your favorite homes and schedule tours online.
4. Attend The Buyer Education Course
One of the requirements of a HomeReady Mortgage through Fannie Mae is that you complete homeownership education through a HUD-approved agency. You can also participate in the HomePath Ready Buyer Program, which includes a home buyer education course. Completion of this course can help you get 3% in closing cost assistance on your loan.
5. Submit An Offer
Once you’ve found the perfect home and completed all other requirements to purchase, it’s time to submit your offer. Your real estate agent can help you craft the perfect offer. And once your offer is accepted, you can start preparing for the closing, when you’ll officially purchase the home.
Fannie Mae HomePath FAQs
Are you a home buyer or real estate investor who has questions about the HomePath program? The section below can help provide clarity about the program and answer any questions you may have.
Should I buy a Fannie Mae HomePath property?
Buying a HomePath property can provide an excellent opportunity for first-time home buyers to find an affordable home with flexible financing. However, there’s a big consideration to keep in mind: Fannie Mae’s real estate owned (REO) properties are sold as-is.
While some of the homes may be move-in ready, others may require light repairs or extensive renovations. If you’re considering buying a HomePath property, a home inspection is critical so you know upfront what repairs will be needed to move into the home.
Can anyone buy a Fannie Mae HomePath property?
If you want to buy a HomePath property, you must be a low-income borrower, have limited cash for a down payment and must not have owned a home for 3 years. You must also meet the minimum credit score and debt-to-income ratio requirements in order to qualify for a HomePath home.
What is the HomePath Ready Buyer Program?
The HomePath Ready Buyer Program allows qualifying borrowers to complete an education course that entitles them up to 3% of closing cost assistance toward a HomePath property. The course must be completed prior to applying to buy a HomePath property.
The Bottom Line
The Fannie Mae HomePath program provides a unique opportunity for first-time home buyers to purchase an affordable home with a simple loan process. These HomeReady loans have several requirements that borrowers must consider.
Additionally, because the homes are sold as-is, buyers may need to be ready to make any necessary repairs. But despite the downsides, a HomePath property and HomeReady loan can be a great option for many buyers. To begin your path to homeownership, get started on your mortgage approval.