This program is for owner occupied, second home or investment properties. The homes eligible are listed at www.homepath.com. These homes are foreclosed properties once serviced by Fannie Mae. If the property you are wanting to purchase is not listed on the website then you cannot use this program.
It is a great opportunity since the loan does not require mortgage insurance and appraisals are not required as well.
The minimum down payment for a primary residence is 3% and the minimum required credit score is 660 with automated underwriting approval. If you credit score is between 620 and 660 you may still be able to purchase under this program if you have a down payment of 20% saved.
Second homes require a 10% down payment and the same credit score criteria as above.
Investment property requires a minimum down payment of 15% with a credit score of 660. The same credit score guidelines apply as above if able to make a down payment of 20%.
This is a huge savings on investment property purchasing as the normal investment property down payment is 25%. The fact that it does not have mortgage insurance is also an amazing savings opportunity.
All credit scores quoted above apply to fixed rate only. The program will allow for adjustable rate mortgages, but the credit standards are that higher scores on credit will be needed.
NO APPRAISAL…An appraisal is not required. The value of the property is determined by the contract sales price. If the borrower wishes an appraisal, it would need to be ordered by the borrower. The lender must not request a copy of an appraisal; otherwise it would be used for the purposes of determining the loan to value.
There is a program similar to this for homes needing renovation and they must be labeled HomePath Renovation Mortgage. This is a completely different program with different guidelines. Please contact us for answers to that program, if your property has the Renovation designation.
We look forward to answering all your questions.