Fannie Home Path
Fannie Home Path
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
97% 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
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
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%
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
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
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.
Short Sale/Short
Payoff
A
short sale or short payoff related to a delinquent mortgage obligation is not
allowed within the last 7 years.
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.
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
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:
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®.
Apply Now
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Call us 888.958.4228
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