Fannie Mae ForeclosuresFannie Mae has extended their promotion to incent home buyers to purchase one of their foreclosed properties thru the end of October 2011. This is a great opportunity especially for the first time home buyer. The hardest obstacle if there is one is that these properties are not readily available in all areas of Contra Costa. Most of the properties will be found in Concord, Pleasant Hill, Antioch, Brentwood, Pittsburg and Bay Point – but I have found them in Danville and San Ramon. Dublin and Livermore are also areas to explore for these properties.

The Fannie Mae Homepath program may be considered  better than a traditional FHA loan, less funds out of pocket to acquire the home and less on the monthly payment. For the typical FHA borrower regardless of the size of the down payment, the borrower will have MI (mortgage insurance) added to the monthly payment. With the Fannie Mae program no PMI is required even though the down payment is only  3%.

Highlights of tFannie Mae Homepath Program:

  • 3% down payment – which can be a gift or funded by a grant (if loan limit is under $417K there is grant money available that can be accessed)
  • 3.5% contribution by Fannie Mae towards your closing costs
  • No appraisal – savings of $400 to $600
  • No PMI – could add up to a couple of hundred dollars per month on the payment
  • Condo projects not considered on standard lending criteria are allowed

Some of the properties qualify for “renovation funding” similar to a FHA 203K streamlined loan with up to $35,000 in repairs (depends on the mortgage amount). This is a great feature as Fannie Mae realizes some of these properties are not in pristine condition and gives the buyer the opportunity to finance the repairs – lessen the out of pocket costs.

You can find some really nice homes that are selling for 40% to 50% of their original sales price. Just as a side note – not all lenders are approved Fannie Mae Homepath lenders. I work with two approved lenders who will process your loan and I will find you the property!

About Linda Urbick Linda

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