There are so many changes going on right now in the mortgage industry. Back in August I wrote about Fannie Mae’s HomePath program which offers special financing for purchasers of eligible Fannie Mae REO properties. Guess what? The guidelines for this program have now changed. At the time of my post, you could take advantage of this awesome product with only 3% down. However, as of November 2013, the minimum down payment requirement increased to 5%. Here’s a brief updated overview of the HomePath loan program:
- Primary residences, second homes, and investment properties are eligible
- Minimum of 5 % down for primary residences, 10% for a second home or an investment property
- No mortgage insurance required
- 660 minimum credit score for LTV > 80%, 640 for LTV < 80%
- Debt to income ratios up to 50% with compensating factors
- All home types eligible; condos do not have to be warranted by Fannie Mae
- Liberal sources for down payment are eligible
- 6% seller contributions allowed for owner occupied and second home for LTVs 75.01%-95.00%, 9% allowed for LTVs less than 75.00%
The most recent HomePath loan I closed was on November 1st, right before the new down payment guidelines came into effect. It was very fortunate for my client as he wanted to put 3% down on his home in the Woodland Heights neighborhood of Richmond Va so that he had as much cash as possible available after he closed to put towards renovating the house.
As far as the loan process goes, getting a HomePath mortgage is very similar to getting a conventional mortgage–the main difference is that an appraisal is not required. As far as interest rates go, HomePath rates are a little higher which is typical of conventional loan products that do not require mortgage insurance if you put less than 20% down.
If you were pre-approved for a HomePath loan prior to November 2013, you should reach back out to your loan officer and get a new estimate including 5% down instead of 3% to make sure you still have the funds you will need to cover the down payment and closing costs.
If you’re interested in searching for HomePath homes currently listed, click here. The HomePath website also offers many resources for homebuyers including a Home Buyer’s Guide, HomePath Calculator, and Podcasts. If you would like to see if you qualify for a HomePath or any other type of loan, I am happy to help. I am also happy to introduce you to a Richmond realtor who has experience helping clients purchase HomePath properties. I would recommend using a realtor who is knowledgable about the HomePath purchase and financing process.
If you are interested in purchasing or refinancing in one of the following states, I will be happy to connect you with a licensed loan officer in your state: Maryland, Delaware, Connecticut, Florida, Georgia, Maine, Massachusetts, New Hampshire, New Jersey, North Carolina, Pennsylvania, Rhode Island, South Carolina, Washington D.C., or West Virginia.