No more homepath loans

[Lj Smith]

We put in an offer on a Fannie Mae homepath house. Mortgage guy originally qualified us with a homepath loan but called us yesterday and tells us that the program has been cancelled by the government and that they will no longer be doing homepath or homepath renovation loans. Has anyone else heard of this?

[Dion DePaoli]

Fannie Mae extended the incentive program until June 30, 2014.  So applications made at this time of the month will not be funded for the additional incentive.  The incentive was a 3.5% down payment instead of a 5% down payment.  As of June 30, the program reverts back to the 5% down.  The program has not gone away, a HomePath loan can still be obtained, just the incentive is gone.  

No Fannie Mae seller (those who make loans to sell to Fannie) need participate in such loans. I am not sure how they are pricing out for the Lender. The payment for delivery of the loan may not entice the Lenders to make the loans in this program any longer so they just don't write the loans for that program. The next runner up for loans with down payments similar to homepath would be FHA.