If you want to buy a home but can’t afford a mortgage for a standard-market property, choosing a HomePath home might be right for you. In this article, we’ll explain more about the HomePath program and how you can buy a HomePath home. We’ll also introduce you to some of the benefits and drawbacks of buying a foreclosed property.
HomePath is a Fannie Mae program that can help you move into a foreclosed home with financial assistance. You may be able to buy a home with a down payment as low as 3% when you take a HomePath conventional mortgage. You may also qualify for closing cost reimbursement equal to up to 3% of what you pay for your property.
HomePath homes are foreclosures owned by Fannie Mae. There‘s a wide range of home types available through HomePath. You may find everything from condominiums to multifamily properties, depending on when you shop.
Fannie Mae sometimes takes control of these properties through a deal called a “deed in lieu.” During a deed in lieu transfer, the homeowner willingly gives up control of the property; this means that the foreclosed homes available through HomePath could be in much better condition than homes that were involuntarily seized.
Other times, Fannie Mae has to take back a property because a homeowner has defaulted on their payments. These homes may be in worse condition because the previous owner doesn’t have the funds or motivation to handle upkeep if they know the home is about to be taken away. These homes may be in significantly worse condition.
In some cases, Fannie Mae might also spend time and money upgrading the home’s interior or appliances. Keep in mind, however, that Fannie Mae sells each home in the HomePath program in “as is” condition. That means you may need to cover any extra repairs after closing.