3% Down Purchases w/ No MI – Investment Properties OK
By: Steve Bush
Interested in an investment property, but don’t want to sock 25% down on what might be a declining asset? There may be a path for you. FannieMae has HomePath loans on HomePath eligible properties that work like traditional FHA loans with two key exceptions. 1) They don’t require any mortgage insurance (MI) of any kind and 2) They are eligible for investment properties.
Kicking the MI is key, because insurance on a $400K purchase can run more than $300/month. That’s the equivalent of $60,000 more on a loan amount.
These HomePath properties are owned by Fannie Mae. Fannie Mae does not want to be in the property business, so they are eager to get rid of their inventory. They’ve offered some steep incentives for borrowers:
3% down payment for owner occupied HomePath eligible properties.
15% down payment for investment HomePath eligible properties.
No mortgage insurance.
Liberal down payment sourcing — down payment can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.
No lender-requested appraisal.
Expanded seller contributions for closing costs allowed.Available for primary residences, second homes and investment properties.
Many condo project requirements are waived.
For more information, contact a HomePath Mortgage lender or click here for the Home Buyers Guide.
Fannie Mae has a First Look program that allows owner-occupant borrowers a 15-day exclusive window on the purchase offer. On day 16, investment offers will be considered.
There’s also a HomePath Renovation mortgage where you can also finance the cost of “light renovations” into the mortgage. Properties must have the HomePath Renovation Mortgage logo to qualify.
Properties are limited, so you need to act quickly. To look up eligible properties, use the California HomePath search site: http://www.homepath.com/state/ca.html, or call a trusted Trojan Financial representative at 800-657-7771.
