Fannie Mae is a major buyer of conventional mortgages sold in the secondary market. When Fannie Mae forecloses on a property and take it back, they list it on the market with local Realtors like other mortgage companies do. But what is special about Fannie Mae foreclosures is that they allow you to obtain a special loan called a Fannie Mae Homepath loan to buy their foreclosures. We are a mortgage company that can handle these very special Fannie Mae Homepath loans.
Here are some special features of the Fannie Mae Homepath loans that we offer on Fannie Mae foreclosures:
- Minimum 3% down payment (but best to go 5% down)
- NO mortgage insurance!
- NO appraisal
- NO condo qualifying
- 10% down for 2nd homes (there is no other 2nd home loan available with less than 20% down!)
- 10% down for investors (there is no other investor loan available with less than 20% down!)
- Fannie Mae properties are usually fully rehabbed with brand new flooring, kitchens, baths, paint and light fixtures when they are sold
Let me speak to some of these benefits as they are all really incredible right now in this lending environment:
NO mortgage insurance
On a FHA loan you now have 2.25% upfront mortgage insurance (MI) + .55% MI monthly. Since there is NO mortgage insurance at all on a Fannie Mae Homepath loan that is a $15,000 savings on a $300,000 loan over 5 years vs. a FHA loan and a $9,300 savings over a standard 10% down conventional loan over 5 years.
NO appraisal
This speeds up the loan process considerably and creates no worries about the appraisal causing problems with you getting your property.
NO condo qualifying
There are many obstacles to obtaining a FHA or conventional loan today on condos and townhomes today because of the difficult requirements these loans have for the condo complex such owner occupancy % and many other requirements of the condo complex Homeowners Associations (HOA). The amazing thing about the Fannie Mae Homepath program is that there are NO condo requirements at all! This allows you to buy a condo that may be very difficult to get financing on without a Fannie Mae Homepath loan.
10% down for 2nd homes
There is no other loan out there period right now to get a 2nd home with less than 20% down. If the property is owned by Fannie Mae you can buy it with 10% down as a 2nd home. This saves you half of the down payment.
10% down for investors
There is no other loan out there period right now to buy an investment property with less than 20% down. If the property is owned by Fannie Mae you can buy it with 10% down as an investment. This saves you half of the down payment.
Fannie Mae properties are usually fully rehabbed with brand new flooring, kitchens, baths, paint and light fixtures when they are sold
Many bank owned properties sold today are in worn out condition and need tens of thousands of your dollars in upgrades after you buy them. Most Fannie Mae Homepath homes have been fully fixed up for sale with fresh new carpeting, paint, new kitchens, bathrooms and light fixtures. And everything is in working order in the house. This can save you a ton of money out of pocket after you buy.
So as you can see, the Fannie Mae Homepath Mortgage is a very special home loan out there right now. If you see a Fannie Mae owned property in California, give me a call and I can get pre-approved. It will usually say in the property listing if the property is a Fannie Mae owned property.
Fannie Mae does have a bit tougher lending guideline than FHA, so FHA loans are still the best way to go if the property is not Fannie Mae eligible or if you can’t meet the Fannie Mae guidelines. Fannie Mae Homepath requires a 45% debt-to-income ratio where FHA is 55% and Fannie Mae requires a 660 middle credit score where FHA is 620.
So here are some reminders of some of the nice things about FHA Loans in California:
- You can go up to a maximum FHA loan amount of $729,750 in many areas of California. This allows you to buy properties with a 3.5% down FHA loan even in the more expensive coastal parts of California such as San Diego, San Francisco, San Jose, Los Angeles, Orange County and more!
- You can get FHA loan approval with up to a 56.9% debt-to-income ratio. Conventional loans with 10% down only allow 45%.
- FHA loan interest rates are still incredibly low!
- FHA loan down payment of 3.5% is still the lowest of any widely available loan out there right now and that 3.5% down can come from a gift from a relative
- You can get FHA loan on a 2-4 unit property that you plan to occupy as your primary residence with only 3.5% down
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a Fannie Mae Homepath or FHA Loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and Homepath and FHA specialist)
858-922-7899
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