HomePath Properties

Pretty much every buyer shopping for homes has run across a yard sign or MLS entry that mentions a particular home being a HomePath property or available for HomePath Financing. What exactly does this mean for buyers though? HomePath is simply Fannie Mae’s program through which it resells properties it has foreclosed on. These properties don’t have to use HomePath Financing and can be bought with cash or any type of loan product. However, HomePath Financing is another option for buyers and they should at least be aware of its general guidelines to see if it might be a good fit for their needs. The following is a great summary of the HomePath program’s positives and negatives as put together by local Sunstreet Mortgage Advisor, Steve Van De Beuken:

Pluses
-Just 3% down payment! Buyers who intend to live in the HomePath properties can buy them with as little as 3% down. This is a huge advantage for buyers that have not set aside a large down payment
-15% down for investors! Flippers and other investors are very active in today’s market and many of them like to keep their cash in their pocket. Buying a non-HomePath property as an investment requires at least a 20% down payment.
-No appraisal required! This can save a buyer time and money. We can also be more flexible regarding the condition of a property.
-No Mortgage Insurance! This is a huge win. VA loans are the only other type of financing available that does not require mortgage insurance with less than a 20% down payment.

Minuses
-Higher interest rates. While a down payment of only 3% is allowable, it is expensive. Mortgage interest rates for a HomePath loan with only 3% down can be 2% to 2.5% higher than non-HomePath interest rates. Even buying with a 5% down payment produces an interest rate that is roughly 0.75% above non-HomePath interest rates. In most cases this wipes out the advantage of not paying mortgage insurance.
-Longer underwriting turn around times- The loan process should not be any longer than a normal transaction. Underwriting may take longer but then there is no wait for the appraisal. In a normal transaction the buyers take the first week to deliver their documentation which coincides with the time it takes to do an appraisal. The potential exists for a slightly longer loan process

Thanks to Steve for this great recap of the HomePath program and be sure to contact Steve if you have any additional questions as to whether this program is the right fit for you.

Sunstreet Mortgage
Steve Van De Beuken
Mortgage Advisor
2840 E. Skyline Dr., Suite 230
Tucson, AZ 85718
Office: 520.547.4149
Cell: 520.235.6862
Email: stevevdb@sunstreetmortgage.com

Stephen Woodall
REALTOR, GRI @ Long Realty Company
Stephen has made real estate his full-time career and passion since 2008, primarily specializing in the Foothills & the Northwest Tucson areas of Oro Valley and Marana. He is a multi-million dollar producer, representing both sellers & buyers. Stephen has tremendous experience in new home sales, listing & selling primary residences, listing & selling vacant land, listing & selling luxury homes, investment properties, rentals, and real estate development parcels.

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