What is a Fannie Mae Homepath property? Although the Homepath loan program is a defunct program, it is still a page that is operated by Fannie Mae that deserves your attention as a buyer. Analyzing the Homepath program will give you a great deal of insight into the procedures that the government sponsored entity (GSE) uses to move real estate. Here are the basics about the Fannie Mae Homepath program.
What is a Fannie Mae Homepath property?
A Fannie Mae Homepath property is a property that was sold under the auspices of the Homepath loan program. This program focused on foreclosed properties that were owned directly by the Fannie Mae institution. There were many advantages to buying these Fannie Mae properties, chief among them the ability to completely waive the private mortgage insurance (PMI) requirement that would usually add one to 1.5 percent to the annual payout of a buyer on a property.
Properties that were sold under this banner also stood on a low down payment promise, giving many low income buyers the ability to get into the real estate market without a large amount of cash on hand. These houses were available in all 50 states, and buyers of all ages and experience levels indulged in the foreclosure market through the Homepath brand.
Why did people purchase Fannie Mae Homepath properties?
More people than average were in the Homepath market to find houses to flip quickly, although many of the properties that Fannie Mae sole were turnkey with no liens on the title. Low income and bad credit buyers often took advantage of the low down payment and PMI waiver options to start their foray into owning a home. Fannie Mae also tends to attract home buyers who are trying to overcome a debilitating financial event such as a bankruptcy.
DIY experts also purchased fixer upper Homepath properties at an extremely low price. With all of the contingencies that buyers could negotiate away on top of reduced upfront costs, people who could shore up a property stood to make a huge profit on a flip.
When did the Homepath program end?
The Homepath program ended in October of 2014; however, Fannie Mae still does business in the foreclosure market. The program was opened as a government response to the 2008 housing implosion in the United States, and the program closed in order to retire the brand name, not the ability of Fannie Mae to sell foreclosures. Its early 2009 implementation meant that it served as Fannie Mae’s main thoroughfare for foreclosure repossessions for five years.
Why is the Homepath page still up?
The Homepath web page still serves Fannie Mae as a headquarters for foreclosure property sales.
How do buyers purchase houses on the Homepath program?
There were two mortgage programs that were under the Homepath banner: the Homepath Mortgage and the Homepath Renovation Mortgage.
The Homepath Mortgage plan was created for people who were looking for a primary residence. The requirements for the program were simpler than the average conventional loan, attracting many first time home buyers as well as people who needed a financial break because of a low credit score or a bankruptcy.
The Homepath Renovation Mortgage was a program to find buyers who wanted a fixer upper. This renovation program served Fannie Mae as well as the buyer extremely well: Fannie Mae did not want to manage the properties at all, and the DIY nature of these properties gave them a very attractive entrance price with plenty of room for a flip sale profit. The renovation program also allowed a buyer to purchase and borrow at the same time, giving them money for contractors. The maximum amount they were allowed to borrow was $35,000.
What were some of the other advantages of the Fannie Mae Homepath program?
Aside from the waiver on PMI payments, the Homepath program saved the buyer a number of costs, most obviously on the home appraisal. Fannie Mae did not require an appraisal on the home, saving the buyer hundreds of dollars in hard cash up front.
Low credit buyers were especially happy with the Homepath program: People were routinely accepted into the program with a credit score lower than 660. This was unheard of during the period after the 2008 housing crisis. Buyers were also able to accept seller concessions on the closing costs totaling up to six percent.
If you were planning on buying one of these homes through the Mortgage Plan to make it a primary residence, you could also take advantage of the First Look program. The First Look offer gave you a time advantage on bids, potentially saving you money on the rising price that would come with active competition on the property. These First Look buyers were given a full 20 day head start on professional real estate investors, easing a great deal of the pressure away from the buying process.
There were many programs implemented by the government in the wake of the 2008 housing crisis, but the Fannie Mae Homepath program was definitely one of the most successful. Although it has stopped in name, it continues in spirit with today’s Fannie Mae foreclosure efforts.
2 Point Highlight
There were many advantages to buying these Fannie Mae properties, chief among them the ability to completely waive the private mortgage insurance (PMI) requirement that would usually add one to 1.5 percent to the annual payout of a buyer on a property.
This renovation program served Fannie Mae as well as the buyer extremely well: Fannie Mae did not want to manage the properties at all, and the DIY nature of these properties gave them a very attractive entrance price with plenty of room for a flip sale profit.
