Saturday, September 24, 2011

Homepath - Fannie Mae's REO Offering

"HOMEPATH" is Fannie Mae's REO offering and some of you may have noticed it being advertised on real estate signs in your neighborhood. REO is a bank owned property which failed to be sold at a foreclosure sale. So what does this plan have to offer you? Well here are the basics:
  • Low down payment and flexible mortgage terms (fixed–rate, adjustable rate,  or interest–only).
  • Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.
  • No lender requested appraisal.
  • No mortgage insurance; ask your lender for cost details on loans without mortgage insurance.
  • Expanded seller contributions for closing costs allowed.
  • Available for primary residences, second homes and investment properties.
The great thing is that there is much more flexibility for the buyer, and the low down payments make these properties more reachable for buyers and investors alike. I spent the past week taking a look at all the homepath properties in the 85383 zip code up here in ther Northwest Valley. While the financing options are attractive, there are some down sides to consider before making an offer on an REO. These properties are usually sold "as is" meaning a property inspection is essential but cosmetic deficiencies will be yours to own as the new proud home owner. I have noticed that these houses tend to be initally overpriced by 10-25% when I have pulled comps in the area, but be patient because I have watched as they tend to decrease rapidly approximately every 30 days. The low down payments may make a property in reach for you, but don't necessarily jump and buy a house that is priced above market value at the get go.

This can be a great packaged plan but buyer beware, use a Realtor to guide you through the process and ensure you come up trumps!!

Chris Spalding

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