Fannie Mae Homepath Mortgage is a very special mortgage you can only get on foreclosed homes that are now owned by Fannie Mae. I wrote more about them in this article http://www.socalfhahomeloans.com/fannie-homepath-mortgage-great-option-to-buy-in-california/. These properties are listed on your local MLS and your real estate agent should be able to do a search for you just to find Fannie Mae owned properties only.
However in this article I’m going to discuss getting Homepath financing on an investment property or second home. To buy an investment property today, a borrower has to put at least 20% down. But if you buy a Fannie Mae Homepath owned home with Homepath financing you only have to put 10% down. This is a big difference in cash outlay for an investor who is buying rental properties. Putting only 10% vs. 20% down allows you to buy more properties and keep more money in your bank account vs. locked up in the property.
Additionally, you get a homepath mortgage on a second home with 10% down. A second home is a home that is used for vacation purposes. So if you see a house in California the mountains, the beach, the desert, on a lake, etc… that is owned by Fannie Mae, you can call me and apply for a 10% down homepath loan.
One thing to be aware of with qualifying for a homepath mortgage on an investment property, is you cannot count the projected rent from the rental house you are buying as income towards qualifying. So you have to qualify to buy the property counting all of the PITI (principle, interest, taxes and insurance) as debt. Whereas when you buy a standard conventional investment property with 20% down, you can count the projected rent as income if you have two years of landlord experience. All Fannie Mae Homepath foreclosed homes will be vacant when you buy them.
There are some tremendous advantages of Fannie Mae Homepath Mortgages listed below:
- Remember, it has to be a Fannie Mae owned home to get this special financing. Your Realtor should be familiar with Fannie Mae listings and it will almost always say the property is Fannie Homepath in the MLS listing
- Homepath minimum down payment is only 3%
- Homepath mortgage financing is available on a wide range of properties in all locations in California; from higher priced coastal areas such as San Diego, Orange County, Los Angeles, San Jose, San Francisco….to lower priced inland areas such as Sacramento, Fresno, Inland Empire, and everywhere!
- The is NO mortgage insurance with Homepath Loans! HUGE advantage! No up front OR monthly mortgage insurance. This compares favorably to FHA loans which have a 2.25% up front mortgage insurance cost and a .5 to .55 monthly mortgage insurance cost. Standard conventional loans carry monthly mortgage as well.
- There is NO worries of condo eligibility with Homepath loans. With FHA loans and conventional loans, condo projects have to pass a whole bunch of tests such as % owner occupancy, % hoa due defaults, hoa maintenance reserves. Homepath Mortgage Financing requires NONE of these checks!
- There is NO appraisal required with a Homepath Loan. This saves you the cost of an appraisal and the potential obstacles to financing an appraisal can create
So I hope you enjoyed the article and please give me a call if you have any questions about Homepath Financing in California. Call me at 858-922-7899 or homeloan8@gmail.com.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and Homepath, FHA, VA specialist)
858-922-7899
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