HomePath Mortgage Financing: What You Need to Know and Top Alternatives Roger Odoardi The days of HomePath Mortgage financing are over and done with, but that doesn’t mean there aren’t still flexible and affordable home mortgage options available for cash-strapped borrowers. Fannie Mae retired its mortgage product in October 2014, after nearly five years due to improvements in the real estate market. The HomePath website is still functioning however, but only as a way of searching for foreclosed properties. The reason the HomePath program was successful is because it offered owner-occupant buyers and investors special financing arrangements on foreclosed homes in the Fannie Mae inventory. Those arrangements included a number of incentives for buyers—most notably down payments as low as 5% of the purchase cost, no PMI and no required lender requested appraisal. A companion program, known as the HomePath Renovation Mortgage, was also discontinued. It allowed buyers to borrow additional funds for light to moderate repairs or improvements to a foreclosed property. But just because Fannie Mae is no longer offering HomePath mortgage programs to buyers doesn’t mean there aren’t other options available. While you may have to meet certain criteria, the various alternatives to the HomePath Mortgage program include similar incentives surrounding down payments and PMI. Suitable Alternatives to the HomePath Mortgage VA Loans Veteran’s Affair Loans offer qualified former and current veterans of the armed services favorable terms on mortgage loans. VA Loans serve all of the same functions as a conventional loan, and can be used to buy, build, or refinance a home. Oftentimes these loans have no down payment and very low interest rates compared to other loans. Learn more here. 97% LTV Loans This is a 97% Loan-to-Value ratio financing option to help homebuyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment. In order to qualify however, at least one of the borrowers must be a first time homebuyer. Learn more here. 95% LTV Loans w/ Lender Paid PMI There are some lenders who offer a 95% Loan-to-Value ratio financing option that includes a lender paid private mortgage insurance. This program is a good alternative because it contains many of the same benefits as the HomePath Mortgage from Fannie Mae—such as low down payment and no monthly PMI. However, unlike the HomePath program, this type of conventional mortgage loan requires an appraisal. FHA Loans at 3.5% down The Federal Housing Administration (FHA) offers a loan program with a low down payment option and other flexible guidelines. FHA loans allow borrowers to put down 3.5% of the contract sales price of the home—which compared to other lenders is far more favorable. USDA Loans The United States Department of Agriculture (USDA) offers a variety of home mortgage loan programs. The Rural Home Loan Program allows eligible suburban and rural homebuyers to obtain 100%, no-money down mortgage financing. This program features a variety of benefits, including; comparatively low mortgage rates, loans up to 100% of property value and reduced monthly mortgage insurance. At Blue Water Mortgage, we know how to get you the mortgage that fits you financial needs. Our team of brokers has worked with all types of lenders to secure clients the best form of home financing available on the market today. Contact us today to start the conversation about purchasing your next home. Roger Odoardi Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.
