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Fannie Mae HomePath - What Home Buyers Should Know About REO Properties

Reviewed by: David Naimey

Approved by: Chad Turner

Fannie Mae’s HomePath REO Program: An Introduction

For this blog post, we will be talking about the Fannie Mae’s HomePath REO program in the eyes of the first time home buyer.  Fannie Mae’s HomePath program is essentially for the selling of newly foreclosed properties that are purchased by Fannie Mae. Fannie Mae can obtain ownership of a foreclosed property, or a property that is going to be foreclosed. The main advantage of Fannie Mae’s HomePath REO program is that it allows first time home buyers to see foreclosed and to-be-foreclosed properties before investors have the chance to. This allows for home-buyers who wish to live in a home can take it off of the market, instead of an investor who would put money into the home, and then re-sell it later on. Investors can also purchase these homes, however. But the incentives are different than for the first time home buyer.

Homes listed on Fannie Mae’s HomePath website come in all varieties, as they can be condominiums or single-family homes. Another detail to watch out for, is whether or not a home will be “move-in ready,” or if it will need repairs prior to being able to complete the purchase of the property. Some homes may need maintenance or repairs. These homes are sold as is, so the first time home buyer may need to protect themselves by order a home inspection. A home inspection can give the first time home buyer an idea of how much and how many repairs are needed after the purchase of the house, and if it’ll be worth it.

The Initial Steps For Fannie Mae’s HomePath Program

Fannie Mae’s HomePath program have a few different requirements than other programs. In order for a first time home buyer to put a bid on a HomePath home, a few things must happen first. Fannie Mae has an online website in which HomePath eligible homes are listed. In order for a first time home buyer to bid on a home, they must first contact the Listing Agent assigned to that specific home. The first time home buyer must submit an offer in writing to that specific listing agent, and usually by a specific time and date as well. Interestingly enough, Fannie Mae does not require a pre-qualification letter with the first time home buyer’s offer on a home. However, this does speed up the process as a whole and is highly recommended.

Loan Programs, Credit Requirements and Down Payment Assistance Programs

Many first time home buyers opt to go through with a Conventional Loan for this program.. Accordingly, the credit score requirements are 620+ and to also put at least 5% down as a down payment. The minimum level of debt-to-income ratio for this program must be equal to or less than 36% of your monthly income. However, the better loans are given to those who have a higher credit score and down payment, as well as being able to forego the need for private mortgage insurance.

First time home buyers are also eligible to go other routes for a loan program, such as Fannie Mae’s Home Ready, which reduces the required down payment to 3%. However, this program will almost always require the purchase of private mortgage insurance. This program requires the first time home buyer to take a home ownership course in order to be eligible for this down payment assistance program.

Additionally, there is a program called Fannie Mae’s HomePath Home Ready program, which is another down payment assistance program. This allows for the low 3% down payment, as well as a 3% credit at closing if the first time home buyer participates in the HomePath Home Ready Buyer course.

Fannie Mae’s HomePath Program is also available for USDA, VA, and FHA loan programs as well.


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