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Home Path Mortgage

Fannie Mae's Home Path Mortgage is a home buying program offering multiple incentives to purchase bank owned homes. Money saving incentives include being able to purchase Fannie Mae homes with minimal down payment requirements and flexible mortgage terms which allow borrowers to pay additional monies toward their mortgage note without incurring penalties.

Buyers of Home Path Mortgage properties can select from most types of residential real estate including single family homes, townhomes and condominiums. Properties offered through HomePath are owned by Fannie Mae and consist of bank foreclosure and repossessed homes.

Purchasing bank repossessions requires buyers to be diligent and obtain home inspections prior to making an offer. HomePath properties are sold "as is" and oftentimes require repairs and renovations. In some instances, Fannie Mae has engaged in minor repairs to improve the home's marketability.

Fannie Mae homes requiring repairs might qualify for the Home Path renovation program which provides buyers with additional funds for repairs. Not all Fannie Mae homes for sale qualify for the Home Path Mortgage option. Only properties listed for sale at qualify for special financing.

Home Path mortgage financing makes a good option for buyers who cannot afford a large down payment. One unique feature of HomePath is buyers have the luxury of using funds contributed from outsiders.

Conventional home loans require borrowers to utilize their own money for down payment funds and prohibit the use of money obtained from a loan or monetary gift. In addition to being able to use money obtained through gifts or loans, borrowers can also apply for grant money.

At present, borrowers can apply for down payment assistance grants through HUDs Neighborhood Stabilization Program Grants. Guidelines and eligibility criteria are presented at the Housing and Urban Development website at

Buyers must be prequalified in order to submit an offer on Fannie Mae Home Path properties. Prequalification can be obtained through mortgage lenders and can take place in person or online. The mortgage prequalification process does not guarantee buyers will qualify for a mortgage loan. Instead, it lets borrowers know how much home they can afford based on their debt-to-income ratio.

First time home buyers will qualify for the $8000 tax credit if they purchase Fannie Mae homes before the June 30, 2010 deadline. Mortgage financiers predict President Obama will extend the deadline again in effort to jumpstart home sales. However, buyers considering a home purchase should consider taking advantage of first time home buyer programs and tax incentives before the anticipated deadline.

Criteria for purchasing Home Path properties include using the home as a primary residence. However, Fannie Mae properties are listed utilizing the "First Look" provision. This loophole provides real estate investors the opportunity to purchase Fannie Mae bank owned homes if no one submits an offer within the first 15 days of the property listing.

Real estate investors can use REO homes as rental property, vacation rentals or utilize seller carry back financing to sell the home to a buyer with poor credit. Seller carry back mortgages are a form of creative financing where the seller carries back a portion of the purchase price for a few years to help borrowers establish or rebuild their credit rating.

Buyers should take time to comparison shop in order to get the best home mortgage rate. A mere 1/4-percent difference in interest rates can increase mortgage payments and cost borrowers thousands of dollars over the duration of the loan.

We invite you to learn more about home mortgages, financing options, home buying programs, tax credits and the pros and cons of buying foreclosure and bank owned real estate in our comprehensive homeownership article library. Take a moment to subscribe to our mailing list to be instantly notified when new home buying information is published.

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Published on March 15, 2010 at 03:19 AM

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