My New Blog

If you think I’m pulling your leg, think again. Welcome to the Fannie direct loan “HomePath”. This is perhaps one of the most flexible loan programs we have seen in 3 years … possibly only outdone by the USDA rural home loan. Unfortunately it is even MORE property restricted then USDA is. This loan is only eligible for homes that are Fannie Mae owned.

So why is this loan so unique? Let’s recap our headline in bullet point format so we look professional.

• As little as 3% down
• No mortgage insurance
• No appraisal required
• Owner Occupied AND Investors eligible
• Some homes Eligible for a HomePath Renovation loan

Less down than FHA.

Fannie Mae has created 2 categories for your down payment qualifications. Standard and Flex.

Standard: Minimum down payment is going to be 5% for this loan type because it is tied to today’s “Normal” Conventional financing guides. Because there is no MI, we don’t need to worry about those special “Declining Market” mortgage insurance guidelines.

Flex: The flex follows more closely suit to the old school my community 97% program. This was a great loan when MI companies would cover it. Again, no MI means no overlay. The Flex will require slightly higher credit scores and a small increase in rate. It’s only fair; you get to keep 2% of your down payment.

No Mortgage Insurance

This may not mean much more to you then some additional savings every month. But for someone in my line of work, this is a GODSEND! Mortgage insurance has grown to be quite a deal breaker over the last 24 months. Constantly changing guidelines, appraisal rejections and declining markets make closing loans with MI a big pain in the neck.

So you might ask, “Why does Fannie Mae close the loan with no Mortgage Insurance? Doesn’t a mortgage insurance policy decrease the lenders risk?” The official reason is not stated. Well it might be, but I didn’t look hard enough to find it. What I suspect is because Fannie Mae already owns the home, they figure that the worst that can happen if someone stops paying is that they get to own the home again. In the interim between foreclosing on Buyer 1 and Buyer 2, they can collect a bunch of interest. Makes sense to me. Wonder why other servicing companies are not following suit?

No Appraisal Required

So this can be a good and a bad thing. If they offered Fannie Mae HomePath Refinances I would be rich. Affirmation of the week: They will create a Fannie Mae HomePath Refinance program .. They will create a Fannie Mae …

The Good: No appraisal means you save money. It also means that you do not risk the delay HVCC can cause or the possibility that the appraisal will get shot down and stop you from buying your dream home.

The Bad: You may not know the homes true value. Are you paying too much? Even though it’s not a loan requirement, it might be in your best interest to pay for an appraisal out of pocket so that you can be sure value is supported. If this is THE home, then value is just a number and who cares. But if you are buying as an investment, spend the $450 so you can be sure you are investing wisely.

Owner Occupied and Investors Welcome

Not many other products will allow for an investor to finance up to 90% of the purchase price of a home. But if you are an investor and you need this style of niche product, maybe begin your search with HomePath eligible properties. There are a few pricing adjustments for both investment and 2^nd homes. But after reviewing the perks, these considerations seem more than fair.

The HomePath logo at the top of this page is clickable .... If you would like to see all the HomePath homes in your area, click this link and begin your search.

If you would like more detail about this or any other type of loan product, please feel free to contact us. You can also apply online for this loan program at www.PortlandHomeLoanExpert.com/loanapplication