HomePath Program for Fannie Mae, Freddie Mac properties to end in October
Washington D.C.: The government program for HomePath mortgage options involving Fannie Mae and Freddie Mac will come to an end Oct. 7.
The wind-down of the program comes as the number of homes in foreclosure in the United States continues to diminish, as well as all money borrowed by Fannie Mae and Freddie Mac has been repaid; with an additional $25 billion in profits turning the repayment into a windfall.
The Renovation Mortgage option had granted borrowing options of up to 35 percent of the value of the property, up to $35,000, in order to make light to moderate repairs to a given foreclosed property.
The Mortgage option had offered a number of options, two of the popular perks being no requirement for mortgage insurance, and down payments as low as 5 percent of purchase cost.
Fannie Mae will soon offer:
1. Interested Party Contributions (IPCs):
“For principal residences with LTV/CLTVs greater than 90 percent, Fannie Mae allows up to 6 percent interested party contributions, rather than the 3 percent standard per the ‘Selling Guide.’”
2. Multiple Financed Properties:
“For borrowers owning 5 to 10 financed properties, a maximum LTV/CLTV ratio of 75 percent for 2 to 4 unit investment properties is permitted – rather than the standard 70 percent per the ‘Selling Guide’ – on fixed rate mortgage transactions only. LTV/CLTV ratio limits for ARM transactions and High Balance Loans are per the Selling Guide. All other eligibility requirements for borrowers with Multiple Financed Properties continue to apply.”
3. Resale Restrictions:
“In the event the mortgaged property is subject to any resale restriction imposed by Fannie Mae as the property seller, the mortgage is eligible for sale to Fannie Mae, notwithstanding any ‘Selling Guide’ restrictions on properties subject to resale restrictions.”
More information on the Fannie Mae options can be found at https://www.fanniemae.com/content/fact_sheet/financing-flexibilities-for-fannie-mae-owned-homepath-properties.pdf
Freddie Mac will offer a similar program, HomeSteps, in some states. More information on HomeSteps can be found at http://www.homesteps.com/
The future of Fannie Mae and Freddie Mac remains in limbo, as some government representatives want to phase them out in favor of private options that would assist in handling losses due to mortgages before government needed to enter the fray.
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