Through their new HomePath program, troubled GSE giant Fannie Mae is offering their foreclosed homes for sale with as little as 3% down. What’s more, that 3% can be a gift from a family member of third party, or a loan from a non-profit, state or local government. Doesn’t this remind you of the “deals” that got us in this housing mess in the first place? There’s a difference. To qualify for those terms, a purchaser must choose one of Fannie Mae’s foreclosed homes, and then buy it “as is.” If the ideal home is found and renovations are needed, a buyer may qualify for the HomePath Renovation Mortgage, which will fund both the home purchase and minor renovations. This is the only time an appraisal would be required. Here’s what a potential buyer can expect, otherwise:
- Low down-payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only).
- You may qualify even if your credit is less than perfect, as low as 660, when most lenders want a minimum of 700.
- You can qualify as an investor or owner-occupant.
- Down payment must be at least 3% for an owner-occupant, but it must be funded by your own savings or by a gift, a grant or a loan from an employer, a nonprofit organization, or a state or local government. Investors must come up with 10% down.
- No appraisal is required.
- No mortgage insurance is required, but the terms of the loan may not be as favorable.