Vani Verma

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Are you familiar with Fannie Mae HomePath? People trying to buy their first home are often faced with the reality that the down payment required is significant. While their finances may be in good shape, it’s too difficult for them to put aside the 20% that many creditors require.

Fortunately, there are some options available for those people that want to purchase a home. The Fannie Mae HomePath program is an option that can help first-time homebuyers and others obtain a house with a smaller down payment and other financial benefits.

A Fannie Mae HomePath property is one owned by Fannie Mae due to a foreclosure. When someone defaults on a Fannie Mae mortgage, the company obtains the property as collateral for the loan. Those properties come in many forms including:

Since the criteria for HomePath properties are narrower than typical homes for sale, it may be a challenge to find these properties in some areas.

Another thing that makes a Fannie Mae HomePath property unique is the condition of the property. Typically, sellers and buyers must go through a lengthy process of inspections and repairs before the home can be put on the market.

The HomePath properties tend to be sold as-is unless the property meets the criteria for Fannie Mae to repair the property before it is listed on the market. When a buyer obtains one of these properties, they receive the home in the condition it was left by the previous owner.

As one can imagine, this situation is not perfectly suited for every buyer, but it offers people the ability to get a range of property types, all the way from a fixer-upper to one that is turnkey and ready to move into.

The HomePath program is designed to price homes competitively in hopes that they will not last long on the market. Once the current homeowner and Fannie Mae arrange a deed-in-lieu, the home is put up on the HomePath homepage, where buyers on the market can view the property.

One requirement of the program is that any offers must be facilitated by a Fannie Mae listing agent. However, buyers can use their local agents to help set up their offer for the Fannie Mae representative.

Some other crucial requirements of the program include:

Buyers will find that the program accepts many types of mortgages such as FHA, USDA, VA, and conventional. However, the as-is condition of the home can disqualify the VA and USDA loans from being used because of the stipulation that the home must be ready to move into.

An important thing to keep in mind about the HomePath program is that they will not accept any contingent offers. So, if you are trying to sell your current home to buy the new property, the homeowners will not remove the home listing and hold it on your behalf.

These requirements are the broad strokes involved with the program. Every type of property, buyer, and mortgage can alter subtle details that Fannie Mae representatives will need to review with the home buyer.

The Fannie Mae HomePath approval process is designed to be stringent and fast. The company wants to get these homes on the market and sold as fast as possible to help the person defaulting on the loan as well as the first-time buyers.

Still, there are unique requirements designed to ensure the buyer has the tools and knowledge they need to maintain possession of the property. These are the steps that a buyer can expect to take when seeking a Fannie Mae HomePath property.

1. Find a Real Estate Agent

As we stated earlier, you must submit your offers through the approved Fannie Mae listing agents. You can still use a local buyer’s agent to help guide you on the path.

Finding a real estate agent in your area will help you locate properties and put your offer through the right channels.

2. Calculate Your Price Range

You can use several calculations to determine how much money you can afford to spend on a home. You want to understand just how much you can afford to spend on your mortgage and insurance every month without having to put yourself in any financial danger.

Typically, you should calculate your debt-to-income ratio (also called DTI or LTI), income, budget, and requirements you have for your home.

3. Seek Financing Options

Homebuyers can use many different mortgages to obtain a HomePath property. It is a good idea to get pre-approved for your mortgage of choice before you get too deep into the home-buying process. That way, you understand the amount of money you can expect from a mortgage company.

Remember that Fannie Mae has some unique financing options such as the HomePath Mortgage Program and HomePath Ready Buyer Program to assist in financing costs.

4. Seek Fannie Mae HomePath Homes

The HomePath website is user-friendly and makes it easy to find homes in your area and price range of choice. The homes arrive and depart the market quickly, so it is best to look often and with help from your real estate agent.

5. Complete the HomePath Ready Buyer Program

The Ready Buyer program is made to help the potential buyer understand every facet of HomePath and how to choose an affordable property for them.

6. Submit Your Offer on the Home

Once you know your price range and find listings, you must submit the offer in writing to a Fannie Mae listing agent.

These steps cover the main process for getting approved for a HomePath property, but every home buying experience is different.

The Fannie Mae HomePath program comes with some upsides and downsides. Here are the pros and cons you should bear in mind when considering the system:

Several benefits are available for those using the program, such as:

These benefits make the Fannie Mae HomePath attractive to new buyers.

Some aspects of the program are not as attractive, including:

These are all things to bear in mind when getting involved with the HomePath program.

The closing process for a property in this program is 45 days or fewer. That timeline can be shortened depending on whether the buyer is using public funding assistance and how long that takes to process.

The Fannie Mae HomePath program is helping people purchase homes that they never would have access to without its help. The small down payments required for these homes along with the competitive pricing make these properties perfect for first-time buyers.

Before you look at Fannie Mae HomePath homes, you need to know whether you can actually afford to own one. Mortgage payments are generally higher than rent in most states. And even when the prices are close, there are other costs associated with owning your home instead of renting.

Your property taxes will be added to your monthly mortgage payment. And if you put down less than 20% for a down payment, your lender will probably require you to pay for private mortgage insurance (PMI) as well.

You’ll also have to pay some costs that you might not have had to pay while renting: utilities, cable, garbage pickup, and any necessary repairs.

Make sure you can comfortably afford not just your mortgage but also any additional expenses before buying your first home.

If you’ve run the numbers and decided that yes, you can afford homeownership, your next step is to meet with a mortgage lender. You can discuss the different types of mortgages and decide which would be best for you. You’ll also want to be pre-approved for a mortgage before you begin house-hunting.

To get pre-approved for a mortgage, you’ll have to share your financial and employment information with the lender. They’ll require documentation such as tax forms, pay stubs, and more. Once they review and verify your information, they’ll determine whether to approve you for a mortgage. If they do, they’ll let you know your mortgage options and terms.

The lender will also issue a pre-approval letter. You can show this to sellers when you’re looking at homes, to let them know that you’re able to secure financing.

To get started on the path toward homeownership, it is wise to seek a real estate agent that can help you meet your goals and purchase the right home.

Above all, remember that your Realtor should be there to aid in your home buying process, not just to show you listings. Helping you avoid the wrong time to buy, the wrong location or the wrong house for your budget can all go a long, long way in making sure that you’re happy with the end result. Beyond that, realtors aren’t all the same, and you will need to find one that gels with your interest as a home buyer before choosing to go the length of the field with them.

UpNest, which is owned by parent company Realtor.com, uses a proprietary agent matching system that considers closed listings, location of listing, and other factors to provide the customer with 3-5 individual proposals. The proposal includes commission information, marketing techniques, a Q&A about the agents, local trends, reviews, and more. Once agents start using UpNest’s platform, the matching system evaluates their performance with UpNest, including conversion rates and response time.