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Should Fannie Mae Homepath Properties Be Your First Choice for Buying Real Estate?

Fannie Mae Homepath properties are becoming a popular choice for those ready to buy a house. Properties consist of residential homes which were repossessed due to foreclosure. Most are priced below market value and many qualify for government grants offered through HUDs Neighborhood Stabilization Program.

Buying Fannie Mae Homepath properties is the same as buying houses through individual sellers. However, properties are sold in 'as-is' condition and are not covered under warranty. Most Fannie Mae homes do require some level of repair so it is important to obtain home inspections and property appraisals to determine the true cost of ownership.

Buyers can apply for financing through Home Path Mortgage. Fannie Mae works with select mortgage lenders who offer special financing terms to buyers of bank owned properties. Home Path Mortgage can be a good choice for buyers with less-than-perfect credit and those who cannot afford a large down payment.

At present, the minimum down payment requirement for purchasing Fannie Mae Homepath properties is 3-1/2 percent. Buyers are allowed to receive down payment assistance. The only other mortgage loans which allow this option are FHA and VA loans. Down payment funds can be gifts from family, friends, employer, or non-profit organizations.

Fannie Mae is also offering up to 3-1/2 percent closing cost assistance to buyers who purchase homepath properties and close prior to December 31, 2010. When financing is obtained through Home Path Mortgage, buyers are not required to pay for property appraisals or mortgage insurance. Combined, these incentives can save buyers a significant sum of money.

Due to a large percentage of foreclosure homes needing repair work, Fannie Mae Homepath offers two mortgage loan options. The first is conventional financing which covers the cost of the home. The second is referenced as Home Path Renovation Mortgage and includes additional funds for necessary repairs. Properties that qualify for renovation loans are identified on the Fannie Mae website with a renovation mortgage logo.

When buyers need to finance repair costs through conventional lenders they often must qualify for a high-interest renovation loan. When buyers finance the full purchase price, banks may not allow them to borrow additional funds for repairs. Applying for renovation loans through Home Path Mortgage can provide borrowers with necessary renovation funds without incurring high interest rates.

HUDs Neighborhood Stabilization Program offers government grants to individual buyers and real estate investors who purchase homes in areas blighted by foreclosure. NSP grant funds must be allocated according to HUDs guidelines and must be used to rehab distressed property or land.

HUD provides an established amount of funds to each U.S. state. Applicants are required to submit NSP grant applications through local offices. Details of the program and a list of state NSP offices are provided at HudNSPHelp.info.

Fannie Mae Homepath properties can be a good choice for real estate investors. Many properties are suited for use as rental homes and Section 8 housing. Investors can obtain up to five NSP grants. HUD sets aside 25-percent of state funding to provide NSP grants to investors who rehab properties to provide low-cost housing.

Investors cannot submit purchase offers on Fannie Mae Homepath properties until they have been on the market for 15 days. Individual buyers are granted 'first look' rights as the program is intended to encourage home ownership and ignite residential home sales.

Home Path Mortgage Offers Low-Cost Fannie Mae Bank Owned Foreclosure Homes

Fannie Mae's Home Path Mortgage is a home buying program that offers incentives to individuals who buy bank owned foreclosures. The Home Path program allows buyers to purchase Fannie Mae homes with reduced down payments and closing costs, along with flexible mortgage terms. Other incentives include elimination of home appraisal fees and mortgage insurance.

The Home Path Mortgage program provides two financing options. The first option is similar to a conventional home loan and is available to individuals who purchase a Fannie Mae foreclosure home as their primary residence. The second option is Home Path renovation mortgage financing and provides additional funds to make light repairs. Both finance options require buyers to obtain funding through an approved lender.

Home Path properties are owned by Fannie Mae and obtained through repossession and forfeiture. Properties include single family homes, townhomes and individual condo units. Properties are sold "as is" and often require some level of renovation. Buyers should obtain a home inspection prior to signing closing contracts.

Under the Home Path program, buyers must provide a minimum 3-percent down payment; making this a good choice for buyers who do not have the necessary funds for conventional financing. A major perk is borrowers can utilize funds obtained from outside sources to meet the down payment requirement. FHA is the only other program that allows down payment assistance.

One option for obtaining down payment assistance grant money to buy bank owned foreclosure real estate is the Neighborhood Stabilization Program offered through the Department of Housing and Urban Development. Billions of dollars have been earmarked for NSP grants to help stabilize communities hit hard by foreclosure.

NSP grant money can be used to buy Fannie Mae foreclosures offered through the Home Path mortgage program. NSP funds are managed by a variety of nationwide partners. Home buyers will need to contact their state's Neighborhood Stabilization Program manager. A list of NSP grant partners is provided at HUD.gov.

Buyers of Fannie Mae real estate must obtain bank prequalification before submitting their offer. Prequalification does not guarantee home loan financing will be approved. Instead, it is used to determine how much buyers can afford to borrow.

First time home buyers who purchase Home Path properties prior to April 30, 2010 qualify for the $8000 federal housing tax credit. Homeowners who have resided in their home for at least five years and purchase a Fannie Mae foreclosure home with a higher value can obtain a $6500 tax credit. Individuals should consult with a professional tax preparer to ensure they are entitled to home buying tax credits.

The Home Path mortgage program is also a good option for real estate investors to purchase discounted investment properties. Investors can apply for NSP grant money, but cannot take housing tax credits against purchased properties. Unless investors obtain an NSP grant, they must wait 15 days after the property is listed before making an offer.

Home Path properties are sold under the "first look" provision. Buyers who receive down payment assistance and grant money are given first dibs during the first 15 days. If no offers are presented, real estate investors can submit offers on up to five properties through a Fannie Mae broker.

It is important to note not all Fannie Mae homes are eligible for special financing. Only properties listed at the HomePath.com website qualify.

Tips for Buying Fannie Mae Homepath Foreclosure Properties

The Fannie Mae Homepath program offers nationwide foreclosure properties at discount prices. Qualified buyers can finance homes through Home Path Mortgage to take advantage of the minimal 3-percent down payment and obtain closing cost assistance.

Fannie Mae Homepath real estate consists of homes which were repossessed through foreclosure or returned by borrowers using a deed in lieu of foreclosure. When banks engage in deed in lieu agreements they allow borrowers to return their home without undergoing the expensive foreclosure process.

Home Path Mortgage is a government-sponsored program that is well-suited for borrowers with bad credit. Many real estate investors use the program when purchasing Fannie Mae homes that require renovation. Home Path offers renovation loans which eliminate the need for high-interest construction loans. Properties which require additional funds for repairs are labeled with a Home Path Renovation Mortgage logo; making them easy to identify on the website.

Nearly all foreclosure houses require some level of repair. When mortgagors struggle to pay loan installments they usually do not have funds to make required repairs. It is not uncommon for foreclosed homeowners to intentionally inflict property damage as their way to 'get back' at the bank.

When banks take possession of foreclosed property they do not engage in repairs unless a problem requires prompt attention to prevent further deterioration. Repairs made by banks are not covered by any guarantee or warranty. Fannie Mae Homepath homes are sold in 'as-is' condition, so it is imperative that buyers engage in due diligence prior to submitting a purchase offer.

Buyers of Fannie Mae Homepath properties must obtain preapproved financing prior to submitting offers. Most properties are priced below market value to account for repair costs and to entice a quick sale. It is not uncommon for multiple buyers to submit bids on these properties, so it is best to submit your highest offer upfront.

Buyers should take time to research available home buying grants through HUDs Neighborhood Stabilization Program. A variety of NSP grants are available to qualified buyers and can range from receiving funds to rehab properties or vacant land to receiving grant money for the full purchase price.

NSP grants are a great option for real estate investors who purchase properties in areas with high foreclosure statistics. Investors can receive a maximum of five grants to buy and restore foreclosure houses.

Many buyers are waiting for the real estate market to bottom out, but that could place them in a position to lose out. While the media portrays the housing market as all gloom-and-doom, there are still great deals to be found. Fannie Mae Homepath is a good place to start.

Last, but not least, Fannie Mae Homepath foreclosures can be a good choice for first time home buyers. Home Path Mortgage offers financing to buyers with less than perfect credit and offers low interest rates to those with good credit. If you are considering buying a house or investment property, take time to review all that Fannie Mae Homepath has to offer.