While the allure of the low price of a foreclosed home is appealing to homebuyers, getting approval for them is not always easy.
Many buyers look towards a home that has been foreclosed as an inexpensive path towards home ownership. The bank holding the deeds to these properties are usually anxious to have you take them off of their hands and have dropped the price drastically to encourage that. The trouble is, some lenders are reluctant to shell out money for a home that may have been left in need of repair.
The Fannie Mae HomePath Program
This is where HomePath comes in. Fannie Mae is the owner of many of the foreclosed homes in St. Louis. In order to assist a buyer, they have put into effect a mortgage program that does not require a home inspection, PMI insurance, or an appraisal. The only catch is that the property must be owned by them. This program began in 2009 to help Fannie Mae unload the thousands of properties it suddenly held the keys to.
As with all Fannie Mae loans, a HomePath loan is not financed by them. They are simply offering insurance to your lender as an incentive to get them to finance for you. What they do is set the guidelines for the mortgage broker. In the case of HomePath, this means as little as 3% down for a buyer who is interested in living on the property and ten for an investor.
In addition, HomePath can also authorize a loan that fits in the monies needed to make repairs on the property. This is a slightly more complicated process that involves an appraisal of the property based on its value after the renovations are complete. A home buyer may receive up to 97% of the estimated home value as cash to fix the house up.
How To Find a Foreclosed Home
Shopping for a home through HomePath requires that the buyer choose only from the homes listed on the HomePath website. This list is constantly being updated, so if you don’t find the home of your dreams today, just check back again in a few days. Purchasing a home this way eliminates the need for a real estate agent and their subsequent fees.
The Mortgage Loan Process
Not every lender is approved to offer loans through HomePath the way Better Rate Mortgage is. With his vast experience with this type of loan, him and his team will be able to walk you through the entire process. The first 15 days of a home’s listing is for people who are interested in being owner occupants only. This allows them to bid on homes without having to compete with the deep pockets of investors.
This is truly a unique program that benefits all sides of the sale and even the neighbors of these homes who are possibly losing home value as an empty, foreclosed home sits next to theirs. Talk to Better Rate Mortgage at (314) 361-9979 today to see how you can work this program for yourself.
Photo credit: Taber Andrew Bain via Flickr