Mortgage giant Fannie Mae has established a financing program meant to help homeowners, second buyers and investors acquire REOs and foreclosed dwellings under the firm's books. With a lot of homeowners being forced to sell or relinquish their properties, the company believes that it can offer properties similar or even better than those sold at foreclosure house auctions.
For buyers of foreclosed homes for sale in Albuquerque, NM, the HomePath program might be of interest. Under this initiative, Fannie will provide owner-residents a 3% down payment option, while second homebuyers can get hold of a down payment offer for as much as 10%. Investors, on the other hand, can avail of down payment offers that can be as much as 15% if they purchased REO homes from the mortgage firm.
Buyers of New Mexico foreclosed homes are usually hindered by high down payment rates and requirements like mortgage insurance and appraisals. Under the HomePath effort, these two common requirements are eliminated.
According to Fannie officials, the elimination of these two requirements will make it easier for buyers to get hold of a Fannie Mae property compared with buying residences at house auctions. However, buyers would be required to have a credit rating of at least 660 before they can acquire a loan worth at least $50,000, but down payments can be financed through employer, grant, gift, saving or a nonprofit organization loan.
The sale of foreclosed homes by Fannie Mae is part of the company's attempt to minimize its foreclosure inventories. Officials have revealed that most of the properties that will be offered by the firm are in good condition and that the program will also offer a mortgage component for renovation similar to what the FHA 203(k) mortgage loan has been offering.
The biggest advantage of the financing program, Fannie Mae has revealed, is in the fact that mortgage insurance is not required. Such insurance is often required for loans with a down payment that is less than 20%. The elimination of the insurance can offer buyers an interest rate of about 5.5% as compared with the regular 6.25%. In addition, Fannie Mae has emphasized that although most dwellings under its books are foreclosed, some of them are in equal quality or even better than those being sold at house auctions.
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