When a home is foreclosed on, the bank usually will re-list the home and market the home “as is”. This poses a problem for a couple of reasons. Many homebuyers have little extra money to put into additional repairs on top of the required down payment. Second, if the seller is unwilling to make any repairs or put any money into the home, it will most likely fail the appraisal and therefore be considered “un-financeable”.
Thank God for the Seattle FHA 203k and Fannie Mae HomePath Renovation Loan Programs. These two mortgage financing programs allow the buyer to finance or negotiate repairs into the contract, leaving the minimum 3% down payment the only upfront out of pocket cost due at closing. Another great perk to this program is, the seller can pay up to 6% toward the borrowers closing costs and buy down points.
I’ve put together a brief outline of the Fannie Mae Renovation Program:
– minimum 3% down payment
– no private mortgage insurance
– full “as completed” appraisal required
– seller will pay up to 3.5% closing costs
– 660 minimum credit score required
– covers up to $35,000 in repairs/improvements to the property (contact Dan for eligible repairs)
– 1-4 unit, owner-occupied residences only
There are more details surrounding this program, so you may want to contact me to discuss the home you are considering and your plans to purchase using the Fannie Mae Renovation Program. I am grateful to be one of the few Seattle area mortgage bankers with experience funding Fannie Mae HomePath Renovation and FHA 203k mortgages, and I am confident that I can help you gather all of the information necessary to help you get the best and safest deal on a foreclosure home.
I also recommend following my REO/Foreclosure Blog where I detail top foreclosure listings in the Greater Seattle area as well as all of the additional mortgage programs that are available to assist homebuyers. You can get FREE access to my REO Home Tour at www.SeattleReoBlog.com
As always, please do not hesitate to contact me directly for more information on the Fannie Mae HomePath Renovation Program and how to get approved to purchase using either the Fannie Mae HomePath Renovation Program or Seattle FHA 203k Rehab Program. In a similar blog, I explain How To Buy A HUD Home for $100 Down.