Turning a new leaf into your life by purchasing a home is a great feeling. In recent years, it has become a bit daunting due to all the price hikes and inflation. Families and couples will indeed look for cheap options to start a new life. Fannie Mae HomePath homes are one of the best solutions in this scenario, as you can get these homes cheaper and at better rates than in the market.

So what are these HomePath houses, and how can you also benefit from FNMA HomePath? Let's find out.

What is the Fannie Mae HomePath Scheme?

Fannie Mae HomePath is a scheme that the Fannie Mae company runs and these houses are known as HomePath. Most of the houses put out in these schemes are foreclosure housing that, due to some reason, the owner relinquishes, or Fannie Mae takes it due to unpaid mortgage. The best part about these houses is that most of the time, you can get a mortgage with easy conditions and minimal down payments.

How Does Fannie Mae Acquire HomePath Houses?

Most of the time, Fannie Mae sells these houses themselves initially to new homeowners with regular mortgage deals. When some of these homeowners are unable to pay their mortgage, these houses have to be foreclosed. Instead of going for full foreclosure, Fannie Mae offered them to others at better deals, thus salvaging most losses.

In general, there are two types of scenarios here.

Deed in Lieu

Fannie Mae acquires the houses under this deal, which are in much better condition because the homeowners willingly hand them over to Fannie Mae. There are different reasons, but most of the time, the family wants to move on to a better deal. These families typically decide to do foreclosure this way with Fannie Mae HomePath because they were having financial difficulty.

Default on Payments

On the other hand, some homeowners are missing a few mortgage payments, and Fannie Mae has to take it from them. In these cases, the homes are in much worse condition because the homeowners are aware that soon they will default. Hence, they stop taking care of their home altogether.

No matter which way they acquire these houses and put them out for sale for the Fannie Mae HomePath scheme, you will get the house as is. This means either you have to pay more for the market value of the house or have to manage renovations yourself.

What are the FNMA HomePath Requirements?

There are many different FannieMae HomePath housing available through this scheme, which can range from regular family houses to condos and even townhouses. Most of these houses vary based on their condition as well and thus may vary in value according to the market.

Fannie Mae employs contractors that are on their panel for repair, so it ensures quality control. Furthermore, they work with the city municipality to ensure that the contractors adhere to these codes.

To keep up with the quality, you can get the latest upgrades after basic renovations have been done. Though in some cases, you may get houses that need work, even after you buy them, you will get a sweet deal out of it.

Here are some conditions of FannieMae HomePath that you should be aware of.

• If you have other offers or are waiting to sell your house, you will be denied this scheme. You have to make the deal then and there and are not waiting on some documentation from your previous sale.
• You must use this home as your primary living and move into the house within 60 days of closing. The only exceptions to the duration are having a job outside the area or sickness and death of family.
• You need to fill out Fannie Mae's tailored contract, which might be different from what you usually see. We highly advise you to consult with an agent for this.
• Please get a preapproval before coming for this mortgage before you are allowed to make an offer. Plus, you have to proceed through a registered agent or their website.
• You cannot, in any circumstance, buy this home without accepting the “as-is” clause. So be sure to check the condition of the house before setting an offer.

Pros and Cons of Fannie Mae HomePath Property

Let's learn about some basic pros and cons of the Fannie Mae HomePath scheme.

Pros

• Lower Costs – You will get a better deal here because you choose from many foreclosure houses that may also require repair or renovation before Fannie Mae puts them in the sale market.
• No Preapproval Required – You can make an offer without getting a preapproved mortgage letter but may need to if you are purchasing this property with another loan.
• Ownership Confirmed – You are under no threat of battling ownership issues, which happens in a lot of other properties.

Cons

• Repair and Renovation – Fannie Mae sells you most properties as is, which you choose from, and can land you houses that need tons of repair.
• No Contingencies Allowed – Fannie Mae will not negotiate with you on any contingency, such as buying a HomePath after selling your current abode.
• Outbidding – First-time owners are easily outbid by investors as these properties are cheap and highly lucrative.

Final Words

When you are buying your first home, it is highly recommended to visit Fannie Mae’s HomePath website to see what is on sale. There are regular listings with new foreclosure houses updated from time to time. You can compare the prices, conditions, and locations of the houses before visiting.

Once you have researched enough, you can finalize a few houses and start bidding for houses that suit your needs best.