Fannie Mae offers HomePath Mortgage Financing to help people who may not qualify for a conventional mortgage buy a home. This financing is available for a home that you intend to make your primary residences, or for investment property. The HomePath Mortgage Financing program extends to certain specified properties in all 50 states.
You may qualify for a HomePath mortgage even if your credit rating is not very good.
The down payment could be as little as 3 percent of the price of the home. Unlike conventional mortgages, the down payment for a HomePath mortgage can be financed from many sources besides your own funds; for example, a gift, a grant, or a loan from a nonprofit organization, your employer, or a state or local government.
The home you want to buy will need to be appraised (a process to determine whether it is worth as much as you plan to pay for it), but you will not be required to pay for the appraisal, a savings of several hundred dollars.
HomePath mortgages can be variable rate or fixed rate. Some HomePath mortgages are interest only; that is, you pay the interest on the loan, but do not pay down the principal.
You may be able to get a loan without paying mortgage insurance. Conventional lenders usually require that you buy mortgage insurance, which costs about 1 percent of the cost of the property, if your down payment is less than 20 percent.
HomePath Renovation Mortgage Financing
A variation on HomePath Mortgage Financing is HomePath Renovation Mortgage Financing. This mortgage covers the purchase price of the home and allows some additional funds to make renovations. To get this type of loan, the property must be your primary residence.