HomePath Florida 2016

HomePath Florida 2016

The Fannie Mae HomePath® program is a fixed-rate, fully amortizing loan program that provides the financing for properties that are owned by Fannie Mae as a result of foreclosure or other similar action such as a deed-in-lieu.          

• Low down payment minimum of 3% down payment is required which can be funded by the borrower’s own savings, a gift, a grant or a secured loan from a nonprofit organization, state or local government or employer
  
• No appraisal required
  
• No mortgage insurance required
• Expanded seller contributions for closing costs allowed 
  

LOAN-TO-VALUE

Primary Residence Purchase

• 1 Unit 95% LTV with 660 minimum credit score and 80% with 620 minimum credit score
• 2 Units 85% 660 with  minimum credit score and 80% with 620 minimum credit score
• 3-4 Units 75% LTV with 620 minimum credit score

Second Home Purchase

• 1 Unit 90% LTV with 700 minimum credit score 80% LTV with 620 minimum credit score

Investment Property Purchase

• 1 Unit 85% LTV with 700 minimum credit score 
• 80% LTV with 620 minimum credit score
• 2-4 Units 75% LTV 620 minimum credit score

HIGH BALANCE FIXED RATE 

Primary Residence Purchase

• 1 Unit 90% LTV with 700 minimum credit score
•  75% with 660 minimum credit score
•  2-4 Units 75% LTV with 740 minimum credit score

Second Home Purchase

• 1 Unit 65% LTV with 740 minimum credit score

Investment Property Purchase

• 1-4 Units 65% LTV with 740 minimum credit score

PROGRAM GUIDELINES 

Owner-occupied Primary Residences, Second Homes & Investment properties are eligible:

• Purchase transactions of owner occupied 2-4 unit properties are subject to the following: 
• 2 units: Borrowers may not own any other residential property of equal or greater value in the same area in which the units are located. The mailing address and property address must be verified as the same. If this verification cannot be made, the property must be treated as an investment property.
• 3-4 units: The loan documentation (credit report, income/asset verification) must show the subject property as the borrower’s address. ·        

The Homeowner’s insurance policy must show that the mailing address and subject property are the same. The purchase contract must show the borrower’s intent to occupy.

SELLER CONTRIBUTIONS

Interested party contributions, as a percentage of the sales price or appraised value, whichever is less, are limited to the following values.

Occupancy LTV/CLTV Maximum Seller Contributions

• Primary Residence up to 97% maximum 6% contribution
  
• Less than 75% LTV maximum 9% contribution
• Second Homes 75.0 up to 97% maximum 6% contribution
• Less than 75% LTV maximum 9% contribution
• Investment Properties All LTVs 2%

Eligible Applicants  

• U.S. citizens     
• Permanent resident aliens      
• Non-permanent resident aliens       
  
• InterVivos Revocable Trusts         
• First Time Homebuyer (Primary Residence Only)

 Eligible Properties      

• Attached/Detached SFRs  
• Attached /Detached PUDs     
• Low-Rise/High-Rise Condo (Condos in Florida are not eligible)  
• 2-4 Units.
  

Self Employed Borrower

• Self employed borrowers must be self employed for a minimum of 2 years     
• Signed and dated copies of the borrower’s individual (and business if applicable) tax returns, including all schedules, for the pervious 2 years
• A YTD Profit & Loss Statement and Balance Sheet.

Non-Wage Earner Requirements

• If the borrower’s income is from sources such as retirement, social security, disability, child support or alimony, the file must be documented with evidence of receipt and proof of continuance for a minimum of 3 years.

The following are required for all borrowers

• 2 year employment history      
• At a minimum 1 year of income documentation is required and a recent paystub reflecting year-to-date earnings is required for each qualifying borrower     
• Income must be documented        

Documenting Rental Income from Subject Property

Because no appraisal will be obtained on HomePath® Loan, a fully executed lease agreement is required in order to use rental income to qualify. If no lease is available then rental income may not be used to qualify.  

Credit Score: The minimum credit score may not be lower than 620 and the score must be generated based on sufficient credit depth. There must be at least 2 scores per borrower.  

Mortgage/Rental Payment History

There may be no history of any 30 day late mortgage or rental payments within the last 24 months. 

Foreclosure

Foreclosures in the last 7 years are not eligible.

Bankruptcy

Bankruptcy in the last 4 years is not allowed. Multiple bankruptcies in the last 7 years are not acceptable.

Prior deed in lieu of foreclosure waiting period

A deed-in-lieu is not allowed in the last 4 years.

Short Sale/Short Payoff

A short sale or short payoff related to a delinquent mortgage obligation is not allowed within the last 7 years.

Mortgage Restructure/Modification

Participation in a restructure of the mortgage due to delinquency requires 48 months to re-establish credit.  

Disputed accounts

In order for the loan to be eligible, disputed account(s) must be removed from credit and re-run through DU to obtain Approve/Eligible results. 

Adverse Credit and Payoff of Adverse Credit

When significant adverse credit is identified in a borrower's credit history, documentation must be provided evidencing whether the derogatory information was due to extenuating circumstances or financial mismanagement, and that an acceptable credit history has been re-established. Any outstanding judgments and/or tax liens, as well as any other derogatory items appearing in the title policy (delinquent taxes, tax liens, mechanics’ liens and collections) must be paid/released to the satisfaction of the title company. The borrower’s own funds must be used to payoff any other liens on title.

Collections and Charge-offs

In certain cases, collection and charge-off accounts will be reflected in amounts that have no material effect on the priority of the lien; therefore, collection or charge-off accounts do not have to be paid off at or before closing.  

Qualifying Ratios

The standard debt-to-income ratio is 45%. The maximum debt-to-income end ratio is 50%.  

Assets Documentation

• 2 months bank statements

Cash Reserves

• First Time Homebuyers Primary Residence 2 months
• If the borrower’s current primary residence is pending sale or is being converted to a second home or investment property, reserves of 6 months for both the retained and the subject property are required.

Second home or investment property transactions

• For second home or investment property transactions where the borrower has multiple financed properties, the borrower must provide an additional 2 months of verified reserves for each additional property.

GIFTS/DOWN PAYMENT

There is no minimum borrower investment required when the following apply: 

• Primary residence up to 95% LTV%    
  
• 2-4 units less than 80% LTV     
• Second homes less than 80% LTV

A minimum 5% investment from the borrower’s own funds is required when:         

• Primary Residence more than 95% LTV
• High balance mortgages on primary residences with LTVs > 80% ·         Second homes with LTV > 80% ·        

All investment property transactions NOTE:

• Gifts not allowed on Investment properties
  

Rent Loss Insurance

If rental income is used to qualify, 6 months rent loss insurance coverage is required. This includes rental income on 2-4 unit owner occupied properties.  

Mortgage Insurance

Mortgage Insurance is not required on the Fannie Mae HomePath®.

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