Everyone looking to buy a home right now is thinking a foreclosure is the best alternative. In some cases it is; and others it is not. I wrote a blog yesterday talking about where to look for foreclosed homes and the types of foreclosures out there. One of the largest selection of foreclosures is Fannie Mae properties.
Fannie Mae properties are homes that the government has backed from various banks and institutions in order to keep the banks cash flow liquid enough to maintain home loans and interest rates at reasonable levels. So, when one of these homes that they have backed goes to foreclosure they in turn begin the process of selling it on the market.
There are a few options availble when you are looking to buy a Fannie Mae home. One is they have a website that lists all of their homes for sale. You can visit www.homepath.com and view a complete list of all Fannie Mae homes on the market currently.
In addition, you will see advertsied on their homes that they either qualify for homepath mortgage or homepath renvoation mortgage. What does this mean to the buyer? A homepath mortgage means that the home does not need an appraisal. The home can be purchased without an appraisal since it quailfies under their guidleines. The process is quicker and the downpayment requirement is only 3% for owner occupants. In addition, unlike FHA, you do not pay mortgage insurance. Not all banks participate in the program. So you need to check with your lender to see if they are a particpating lender for this program.
The other program is homepath renvoation mortgage. This is one where it is determined that the home in it's present condition is not suitable for a reasonable person to live in without some reparis being done. The reparis can be minor and cost a few hundred dollars or be major and cost thousands. But this program allows the prospective home buyer to finance the cost of the repairs into the mortgage. So, you are purchasing the home in the present condition with the cost of any reparis needed being added to that mortgage amount.
Just becasue you are purchaing a Fannie Mae home does not require you to use their mortgage option. In fact, you can buy a Fannie Mae home and use any type of financing you wish (as long as the house will qualify) for that type of finance option.
There are options availble to you when you are looking to purchase a foreclosed home and you need to be aware of the options availble to you. Not everyone will qualify for all the programs. However; not knowing is worse than knowing and not being able to.
Dave diCecco
Realtor/Broker
www.davedicecco.com
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