Questions and Answers
What are some of the benefits for agents?
Increased opportunities for making dreams come true, more successful closed sales, more commissions.
What is the HomePath Renovation Mortgage?
A HomePath Renovation Mortgage enables buyers to purchase and renovate a Fannie Mae HomePath property in one single loan with one closing.
What are the benefits to the borrower?
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What property types are eligible to qualify?
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What are the eligible occupancy types?
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What are the maximum LTV's per each eligible property type?
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What repayment terms are available for Fannie Mae HomePath properties?
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What are considered eligible improvements?
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What are considered ineligible improvements?
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How are the renovation costs calculated?
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What costs can be included in the loan?
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How is the LTV determined?
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What are the credit score guidelines?
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How is the contingency reserve calculated?
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What are the reserve requirements?
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What are the guidelines regarding interested party contributions?
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What is the maximum loan amount?
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On which screen in ProNet do you add the total repair cost?
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What are some of the benefits of a HomePath Renovation Mortgage for the borrower?
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The maximum loan amount for a HomePath Renovation Mortgage is best determined by which of the following?
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What is the website address for looking up Fannie Mae owned REO properties?
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What is a HomePath Renovation Mortgage?
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Study Notes
Benefits for Agents
- Increased opportunities to help clients achieve homeownership dreams
- Higher rate of successful closed sales
- Increased commissions from sales
HomePath Renovation Mortgage
- Allows buyers to purchase and renovate a HomePath property with a single loan and closing
Finding Eligible Properties
- Search for eligible HomePath properties at www.HomePath.com
Borrower Benefits
- Low down payment required
- Flexible sources for down payment funds
- No mortgage insurance (MI) required
Eligible Property Types
- Existing properties with a Certificate of Occupancy
- 1-4 unit residential homes, condos, modular homes, and various unique homes (row, dome, bale, log cabins)
Eligible Occupancy Types
- Single-Family Residences (SFR): owner-occupied, second homes, and investor-owned
- 2-4 unit properties: both owner-occupied and investor-owned eligible
Maximum Loan-to-Value (LTV) Ratios
- SFR: owner-occupied at 97%, second homes and investor-owned at 85%
- 2-4 unit properties: owner-occupied and investor-owned at 75%
Repayment Terms
- 30-year fixed rate mortgage available only
Eligible Improvements
- Improvements must be permanently affixed, e.g., roof repairs or replacements
Ineligible Improvements
- Structural or foundational changes are not allowed
Renovation Cost Calculation
- Renovation costs can be up to 35% of the after-repair value (ACV) or $35,000, whichever is lower
Loan Inclusions
- Costs covering labor, materials, and contingency reserves can be included in the loan
LTV Determination
- LTV is based on the lower of acquisition cost (purchase price plus renovation) or ACV
Credit Score Guidelines
- Minimum credit score of 660 required if LTV is 80% or more; otherwise, score determined by Desktop Underwriter (DU) findings
Contingency Reserve Calculations
- 10% of renovation costs if utilities are on during appraisal, 15% if they are off
Reserve Requirements
- Owner-Occupied (O/O) properties as per DU guidelines; second homes and investments require six months of Principal, Interest, Taxes, and Insurance (PITI)
Interested Party Contributions
- Contributions vary based on LTV/CLTV:
- 6% for primary residences (LTV/CLTV 75.01% - 97%)
- 9% for primary residences (LTV/CLTV 75% or less)
- 2% for investor properties
Maximum Loan Amount
- Loan amount capped at $417,000
Adding Total Repair Cost in ProNet
- Total repair costs are entered in the Transaction Details screen
Benefits of HomePath Renovation Mortgage for Borrowers
- Max 97% LTV for owner-occupied properties
- Loan amounts based on lower of as-completed value or purchase price plus renovation
- Renovation funds included in loan amount
- Various standard down payment sources accepted
- No MI required
Determining Maximum Loan Amount for HomePath Renovation Mortgage
- Determined as 35% of as-completed value or $35,000, whichever is lower
Website for Fannie Mae Owned REO Properties
- Access information on properties at www.homepath.com
Definition of HomePath Renovation Mortgage
- A loan that allows borrowers to purchase and renovate REO properties in a single transaction with one closing process
Studying That Suits You
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Description
Test your knowledge on Fannie Mae HomePath with these flashcards. Learn about the benefits for agents and discover what the HomePath Renovation Mortgage offers. Perfect for real estate professionals looking to enhance their understanding of HomePath properties.