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Old 12-02-2009, 07:43 AM
 
Location: southwest TN
8,157 posts, read 14,122,463 times
Reputation: 14736

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Can someone explain to me very simply what this implies?

I understand it means a REO property with the mtgor being Fannie Mae; but does it imply a need for renovation? If not, why not simply list the house? Not that we would buy with a Fannie Mae mtg; we'll go conventional - but something seems to be ... off.

First, there's only 1 pic.
Why make it so easy to buy this property? 1% down?

Are there construction mtg terms? increasing the loan as work is done?
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Old 12-02-2009, 08:00 AM
 
Location: Barrington
41,299 posts, read 31,326,358 times
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From the FNMA website:

It's applicable to primary residences:
Financing to fund both your purchase and light renovation
Low down payment and flexible mortgage terms (fixed-rate or adjustable-rate)
Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit, state or local government, or employer
No mortgage insurance ( your rate will likely be higher)
HomePath Renovation Mortgage financing is available from several approved lenders

I would assume this place is in need of some work ( thus only one picture) and they will finance it.

FNMA has a different program for investor financing.
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Old 12-02-2009, 08:39 AM
 
Location: southwest TN
8,157 posts, read 14,122,463 times
Reputation: 14736
I read the FNMA website, what I was looking for was an explanation:

"Financing to fund BOTH your purchase...." - so does that make it similar to a construction mortgage? base mortg to purchase, then adding additional principal as work is completed, supplies purchased, etc?

What about the practical aspects of this? Has anyone done one of these, did it really need only light renovation or need major work? Why go with a homepath Ren Mtg? IF we decide to buy another house right now (we are contemplating it), we were planning a conventional mtg with 20% down, but are there problems with that? Would it make it harder to by a FNMA REO property with a conventional mtg? We have no plans to live in the home within the next 2 years, that automatically disqualifies us from FNMA, at least from when FNMA was originally set up - maybe they have different rules now. But wouldn't the mtg rate be higher going through FNMA rather than conventional?


What's the benefit to me to look at this home in more detail rather than look for a different home? (I like the outside and want to see the inside set-up.) I want to see more yard (thanks google maps, I got some clue as to the land).
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Old 12-02-2009, 10:56 AM
 
Location: Salem, OR
13,707 posts, read 31,316,609 times
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Homepath is like an rehab loan. They do two appraisals, one for current value and one for market value fixed up. Then you have an escrow account where your rehab money is placed. As work is completed contractors get paid out of the escrow account.

It's just a means of financing the fix up costs into a mortgage since many people don't have cash on hand to make the house more habitable.
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Old 12-02-2009, 06:14 PM
 
Location: southwest TN
8,157 posts, read 14,122,463 times
Reputation: 14736
That's what I was wondering - thanks, Silverfall. So it isn't exactly a construction mortgage, it's an all at once with an escrow yet just like a construction mtg, the funds are released by the mtgor.

So the follow-up question is this: Is the asking price a price before repairs or after? in otherwords, if there's 10K of repairs needed and let's say the asking price is $90K - is that actually $90 purchase +$10K repairs for a total mtg of $100K? or is it actually 80 + 10?

And...
REO properties, do the banks/holding co/whatever stick to the asking price is or is there negotiation as with any other property?

Yeah, I've got a property in mind - only 1 darn picture on the website but the property piqued my interest - plus the info on the tax card has me thinking this is a pretty good deal.
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Old 02-05-2010, 02:45 PM
 
1 posts, read 7,113 times
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Can you close escrow before the repairs are made or do you have to have everything done before closing?
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