With low interest rates and home values, many people have viewed now as a great time to buy an investment or rental property. However, for those who have become used to the new lending environment for a primary residence are shocked that most programs will require you to put at least 20% down for an investment property – unless you can take advantage of the HomePath Program by Fannie Mae. This is a program that is among the lowest down payment options available for home purchases.
HomePath Program Overview
The HomePath Program was set up by Fannie Mae as a way to unload foreclosure inventory held by Fannie Mae. Since Fannie Mae is on the hook for these properties they are making certain concessions to allow these properties to be sold more easily. First, they require no appraisal for financing (although you can choose to have your own appraisal conducted, should you choose). Secondly, they allow for purchasers to buy HomePath eligible properties as their primary residence with 3% down with no mortgage insurance. Investors can buy eligible properties with 10% down with no mortgage insurance.
Investment Property Benefit
This is a huge boost for investors who have good credit but have found the financial burden of coming to the table with 20% down payment too steep, with the added benefit of not having mortgage insurance of PMI tacked on to the mortgage payment – making it easier for rental income to cover the mortgage payment. Typically however, homes will be listed on the market for primary residence buyers for the first 14 days – after which they will begin accepting offers from investment property purchasers.
To find eligible properties, visit HomePath.com – you can view currently available properties in your State, County, City or Zip Code. If you would like to see available rates for the program feel free to contact me anytime.