Fannie Mae’s HomePath Replacement: The Home Ready™ Mortgage
Fannie Mae HomePath™ Mortgage
Looking at the Fannie Mae HomePath program for your next purchase of a home? You're not alone -- HomePath has helped scores of U.S. buyers get access to homes on-the-cheap.
HomePath has also morphed since its initial release into a different type of home loan option -- the HomeReady™ home loan.
Here's a quick quiz to see what you know of the new HomePath program.
What is Fannie Mae HomePath?
A. HomePath is a list of foreclosed homes for sale
B. HomePath is a homebuyer education program
C. HomePath is a closing-cost assistance program for first-timers homebuyers
D. HomePath is a "special deal" for investors
The answer? All of the above.
"HomePath" is actaully a brand name which describes several closely-related homeloan programs.
Here's a quick rundown of the HomePath program's benefits, and how you can take advantage of them as a home buyer in today's mortgage market.Verify your new rate (Nov 19th, 2017)
HomePath: Homes Sold At A Discount
At its heart, HomePath is a program showcasing certain homes for sale nationwide. Specifically, homes financed with a Fannie Mae-backed mortgage which have gone into default or foreclosure.
HomePath homes are homes which have been repossessed by Fannie Mae and which are priced to sell quickly.
It's not uncommon for foreclosed homes to be sold at a discount to market of 20% or more.
However, just because HomePath homes can be purchased cheaply, that doesn't mean that they're always a bargain.
Fannie Mae is careful to warn buyers that HomePath homes are always sold "as-is", which means that major repairs are sometimes needed; and, that the value of a HomePath home is never guaranteed.
This is among the reasonswhy it's important to do your homework on a home before submitting an offer to purchase. You want to make sure you know on what you're actually bidding.
It also why Fannie Mae requires buyers to make offers via a licensed real estate agent.
Working with an agent minimizes a buyer's likelihood of overpaying for a home -- even one priced at a massive discount to market.Verify your new rate (Nov 19th, 2017)
The HomePath Mortgage
The HomePath mortgage, available via Fannie Mae, was updated and replaced in 2014. Today, the program is known by its trademarked name, HomeReady™.
HomeReady is similar to the original HomePath mortgage program.
Like its predecessor, the HomeReady mortgage promotes homeownership within communities, and speeds the sale of foreclosed homes.
The HomeReady program also offers generous terms to its borrowers.
Via the HomeReady home loan, buyers of Fannie Mae properties can make purchases with just 3% down. Along with the Conventional 97 program, this is smallest downpayment percentage Fannie Mae allows.
Furthermore, via Home Ready, your entire downpayment can be a gift -- you're not required to bring your own cash to closing.
The benefits don't stop there:
- For buyers who plan to live in the HomePath home, maximum seller concessions are doubled to an allowable six percent of the purchase price
- For buyers who plan to make the HomePath home an investment, restrictions are relaxed under the 5-to-10 properties program
- For all buyers, HomePath homes can alternatively be financed via the FHA or, for military borrowers, via the VA home loan program
You're even allowed to use non-occupying co-borrowers on your application, should you want the help to get qualified.
HomePath "Ready Buyer" Pays Your Closing Costs
The Fannie Mae HomePath program is an excellent way for buyers and real estate investors to find homes for sale at a discount. It's also beneficial to first-time buyers looking to save money on closing costs.
As compared to last year, typical closing costs are down seven percent. Costs still add up, though -- especially depending on where you live.
Via the HomePath "Buyer Ready" option, buyers who have not owned a home within the last three years can be awarded closing cost assistance of up to 3% of the home's purchase price.
Closing cost assistance is paid by Fannie Mae, and delivered to your closing.
In order to be eligible, buyers must only complete an online course on homeownership, pay a $75 fee (which is refunded in-full at closing), and print their education completion certificate for "the file".
Furthermore, buyers can use the HomePath Buyer Ready course to satisfy the education requirements of a downpayment assistance programs.
The Buyer Ready curriculum can be used in place of a HUD-sponsored counseling course.
What Are Today's Mortgage Rates
The HomePath program and HomeReady™ mortgage offer flexibility and provide opportunity. See for what mortgage rate you'll be eligible.
Get today's live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.Verify your new rate (Nov 19th, 2017)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.