On June 24th Fannie Mae announced significant changes coming to financing options on Fannie Mae Owned Properties and has provided notice to lenders that they will be eliminating the variances for HomePath Mortgage and HomePath Renovation Mortgage on October 7, 2014. The variances are the specific parts of the program(s) that allowed for reduced down payment, no mortgage insurance, no appraisal, reduced condo requirements and such.
The letter sent by Kristy Fercho, Senior Vice President, Customer Engagement with Fannie Mae stated, “On October 7, 2014, Fannie Mae will remove the HomePath Mortgage and HomePath Renovation Mortgage logos from properties listed on HomePath.com, and Fannie Mae REO properties will no longer be listed as eligible for HomePath Mortgage/HomePath Renovation Mortgage financing. We are making corresponding changes to the requirements applicable to delivery of HomePath and HomePath Renovation Mortgages under the subject Variance”
The Variance will be modified to reflect the following requirements for delivery of HomePath and HomePath Renovation Mortgages on or after October 7, 2014″
(a) The lender must have an executed purchase contract for the sale of the related property that is dated on or before October 6, 2014;
(b) The lender must document the loan file with a copy of the property’s “Listing Details” page printed from http://www.homepath.com on or before October 6, 2014, showing the HomePath Mortgage and/or HomePath Renovation Mortgage logo, indicating the property’s eligibility for HomePath Mortgage and/or HomePath Renovation Mortgage financing. The Real Estate Purchase Addendum reflecting the selection of HomePath Mortgage or HomePath Renovation Mortgage financing may be used as a substitute for the printed “Listing Details” page showing the logo, if it is dated on/or before October 6, 2014; and
(c) HomePath Mortgage/HomePath Renovation Mortgages must close by December 31, 2014.
Ms. Fercho went on to say, “Fannie Mae will update the Selling Guide at a later date to offer some flexibility for financing the purchase of Fannie Mae REO properties.”
For Realtors, Homebuyers or Investors wanting to purchase a foreclosed property using a HomePath Mortgage or HomePath Renovation Mortgage variance, you have only a very limited time to get your clients in contract on these properties! Effective October 7, 2014 traditional Fannie Mae guidelines must be adhered to.
Renovation Loans will still be available on Fannie Mae Owned properties after 10/7/14! Please refer to the Fannie Mae HomeStyle Renovation Loan which allows up to 95% financing OR the FHA 203K Renovation Loan which allows up to 96.5% on a purchase and 97.75% on a refinance renovation transaction.
CASH ONLY properties do have financing options available with minimal funds out-of-pocket – DO not be scared away from these great opportunities – You can make any home your “Dream Home” in this as-is market by using a renovation loan!!!
Call me today to discuss your Renovation Loan Options at 916-235-3989 – I have been helping clients with mortgage loan needs since 1999 and I specialize in FHA 203K Renovation Loans in California! (Read More about Sheri here)