There is some buzz in the mortgage world about Fannie Mae’s HomePath program. It is a program I am often asked about, and have heard some pretty interesting misinformation that my clients have received from friends, family, and the internet. At its core, it is a program to help sell foreclosures currently owned by Fannie Mae, by allowing borrowers to either skip the appraisal and inspection or to borrow funds over the current value of the home to do repairs.

Many of my clients have found houses at a great deal that they know they can turn into a great home if they could only borrow the money they need to repair it. Unfortunately, these homes are often not in a livable condition and would fail an appraisal or inspection. To combat these issues, Fannie Mae is willing to allow houses to be purchased through the HomePath program without an appraisal, or for more than the appraised amount if there is work intended to be done. These mortgages are similar to the FHA 203k loan, however they are much less restrictive and more can be borrowed.

Further, there is no mortgage insurance and only a 3% down payment is required. So, let’s say the house you want is a HomePath approved home, and you plan to put less than 20% down, you can avoid all mortgage insurance through HomePath, rather than going with an FHA or conventional loan.

If you have any questions about HomePath, or if you would like to find out how to qualify, please contact me. And if you have anything to add about HomePath, please leave a comment.