Fannie Mae HomePath Mortgage Program
Fannie Mae HomePath is one of the many mortgage programs available to buyers in the US. By viewing the mortgage education section of our website, you will find additional educational articles on many of the other mortgage programs available. For further assistance on mortgage loans, contact our company today.
Fannie Mae HomePath Program
The Fannie Mae HomePath Program is also commonly known as the HFA Preferred incentive program. Effectively, it revolves around something called HomePath homes. Now, this refers to homes that have been purchased and owned by Fannie Mae. Specifically, foreclosed properties.
What is a foreclosed property?
By definition, a foreclosure is where a lender takes ownership of a mortgaged property¹. This happens when borrowers fail to repay the lender, so action must be taken to reclaim the money. The lender is then free to sell the home or do as they please with it.
With the Fannie Mae HomePath Program, buyers will have access to any of these HomePath homes. A broad range of properties is available, typically ranging from traditional houses to condos and apartments. The main aspect of this program is that buyers might be able to receive up to 3% in closing cost assistance toward the purchase of a HomePath property.
Different requirements must be met, but the gist is that you could get a mortgage for a Fannie Mae HomePath home with a down payment that is low.
Who is eligible for the Fannie Mae HomePath Program?
Anyone can be eligible for the Fannie Mae HomePath Program, but there are criteria to meet. To begin, the program only covers HomePath properties, so any other property will be discounted. Secondly, you must purchase this property as your primary residence. For reference, the IRS defines your primary residence as the place where you spend most of your time². In most cases, this will be the home where you live day by day.
The third requirement is one that most people tend to forget. In order to qualify for the Fannie Mae HomePath incentive, you need an HFA Preferred mortgage. What is this? It's a mortgage that's granted to first-time or seasoned homebuyers with low to moderate incomes. Unlike conventional mortgage options, an HFA Preferred one requires you to work with your local housing finance agency. As per the NCSHA, housing finance agencies are independent and help to set people up with affordable housing options³.
Thus, you need to go through the process of getting an HFA Preferred mortgage if you want the Fannie Mae HomePath incentive. It's very important to note that any homes bought with an FHA, USDA or VA mortgage loan are not eligible.
To summarize, you need to purchase a HomePath property as your primary residence and receive an HFA Preferred mortgage. From here, you might be able to access the incentives and enjoy some off of your down payment.
Why Should You Consider the Fannie Mae HomePath Mortgage Program?
This could be an excellent option if you are looking for affordable housing options. Due to the eligibility criteria, the Fannie Mae HomePath program is largely suitable for people on low to moderate incomes. If you have struggled to find a house that you can afford, this could be an option to think about.
Moreover, this program is ideal if you want to reduce your initial down payment. Many prospective homebuyers won’t struggle to afford mortgage repayments, but they do find it challenging to save for the deposit. It can take an extremely long time to raise the funds to afford a down payment, at which point the property you’re viewing could be off the market. The ability to only require a 3% down payment allows for more realistic saving goals, letting buyers make a move on their dream home.
In conclusion, the Fannie Mae HomePath mortgage program is available to large portions of the population. When compared with other home loan programs, the eligibility requirements are lenient. If you still have any questions relating to this topic, we have numerous resources that may be of assistance. We suggest educating yourself on both FHA or USDA loans as they are two of the most popular programs in the US, and you can compare the features and requirements against this one for an accurate view on which one might suit you better than others. Additionally, contacting our mortgage brokerage firm can help you receive more specific advice if required.
TaxAudit: IRS definition of primary residence