No appraisal required.  The Buyer and Fannie Mae negotiate the price and that’s it.  This is a huge step in making the purchase transaction easier in both cost and time savings for your Buyer.  There are also no “declining market” issues.

 No mortgage insurance required.  No PMI; this is remarkable when you also consider the next bulleted item…

 High maximum LTVs are allowed.  Down payments can be as low as 3-5% on primary or 2nd homes.  Only 10% down is required on investment properties (rentals).

Available for primary homes, second homes AND investment properties.  A person can finance up to 10 homes with this program!

Low credit score requirements.   Although credit scores are part of the equation, there is more flexibility with this program.

Up to 6% seller contribution.  A great way to roll closing costs into the loan.  Conforming loans are limited to 3% concessions.

Available anywhere in the state of Michigan.   No limits on rural or urban property.  No Buyer income limitations.

Program limitations:

·         The home must be a Fannie Mae owned home (foreclosed upon and now in the hands of Fannie Mae not just any bank).  The home must also be approved for the HomePath program.  If it’s listed on www.homepath.com, it’s eligible.

·         Because it’s a relatively new program, there aren’t a lot of listings that qualify yet.  If you’re a real estate agent that has a Fannie Mae listing, you should get that home approved for this program.  It will make it much easier to sell.  As this program gets more exposure, hopefully more of these listings will be qualified and available for your clients looking for that great deal.

·         The fees and interest rates are slightly higher than a conforming loan.  However by eliminating the monthly PMI requirement, the borrower still comes out way ahead financially.

·         No rehab lending yet.  Although Fannie Mae is working on adding a “renovation mortgage” to this program, it is only being offered in select areas on a limited basis at this time.

Something else you should Know…  Due to changes in state law, licensed mortgage brokers and any of their loan originators must now be approved by the state of Michigan.  Extensive testing, a back ground check, fingerprinting, registering with the state and national registry, etc. is now required.  As of April 1, 2009 any mortgage broker or loan originator that works for a broker that is not registered is not allowed to receive compensation for loan origination.  This is a long awaited date for many of us as the professionals in this industry are glad to see this kind of regulation.  I’m proud to say that I was one of the first to be registered and approved and hope that the realtors that I work with recognize my commitment to continuing to operate in the mortgage industry in a fair and responsible way that is beneficial to any and all clients with whom I work.  It’s also worth noting that as of today, of the roughly 10,000 expected mortgage registrants in Michigan,