All Forum Posts by: Anders N

Homepath does not require W2 income verification per se. Follows regular Fannie guidelines so you can certainly qualify as self-employed as long as you report enough income to qualify.

Without any income verification you'd be looking at commercial financing or hard money.

Homepath FInancing 2-unit investment down payment requirement is 10% unless you already own 4 properties financed with Fannie Mae mortgages. If you have the previous 4 properties than down payment would be 25%.

This link will give you lenders by State.

http://www.fanniemae.com/homepath/financing/lenders.jhtml;jsessionid=LOUXLVCYMZRDDJ2FECISFGA

Good luck!

The buyer just pulled out of the deal I was involved after 7 weeks and no answers or indications from Indymac. He just signed a P&S for an REO property instead.

This topic was pretty well covered in the following thread: Please 'splain it to me like I'm 12 years old

If buyer is getting FHA financing the deal can happen until the property has been owned for 91 days, period. After 90 days the same criteria is applied as for conventional loans.

Though it is not a agency (FNMA/FHLMC) spelled out guide line pretty much all lenders use the same type of overlay guidline when it comes to value of a property that has sold within the last 24 months. Below is the Wells Fargo one which is very explanatory, but again in the end all lenders will be very similar.

Effective with new registrations on or after December 15, 2008, Wells Fargo Wholesale Lending will require that properties with increases in value during a short period of time (0 – 24 months) must include the following requirements to document the validity of the increase in value.

• Reason for the increase: The appraisal must include the reason for the increase. The explanation provided must support the amount of the increase. The appraiser’s comments need to be specific and detailed. Photos and evidence to support the value must be provided. Vague comments such as “the market values in the area are increasing†or “subject has been remodeled†are not acceptable.

• Documentation to support the increase: The file must also contain documentation to support the increase in value, such as proof of increasing values for the market, documented home improvements (along with the improvement contracts and receipts). The amount spent to renovate or improve the property does not automatically equate to an equal value increase.

If the property is in an area with a Market Classification 2, 3 or 4, or the appraisal indicates the property is in a declining market: The reason for the increase in values will only be allowed if significant improvements have been made or the borrower purchased the property under a distressed sale or non-arm's length/at-interest transaction and the above requirements have been met to substantiate the amount of value increase for the market.

If the increase is unsupported or the documentation to support the increase is not provided, the decisioner should use the lower of the original documented purchase price, auction/ foreclosure bid/value or the new appraisal value to determine LTV/TLTV/CLTV.

The properties are listed at homepath.com so you can see pricing there. The ones I looked at do generate postive cash flow but are a bit higher than 60% of FMV.

You are correct that all adjustments apply to these loans just like all FNMA loans. One difference is that a lower credit score is allowed on these, though you will pay for it.

At the moment the pricing is very contracted and giving up a point in adjustments can kick the rate up by as much as 1%. Points are cheap right now and since adjustments are the opposite they are expensive.

You should have no problem negotiating for seller (FNMA) to pay the adjustments up to max limit based on how much you put down.

I'm aware of one short sale in my area that IMB has been sitting on for two years. I'm involved with one right now that started 1 month ago so it will be a good test to see if things have changed. Supposedly they order the appraisal 2 weeks ago but I have heard nothing since. My expectations are set low.

Forgot to paste the Wells guidelines:

Effective with new registrations on or after December 15, 2008, Wells Fargo Wholesale Lending will require that properties with increases in value during a short period of time (0 – 24 months) must include the following requirements to document the validity of the increase in value.

• Reason for the increase: The appraisal must include the reason for the increase. The explanation provided must support the amount of the increase. The appraiser’s comments need to be specific and detailed. Photos and evidence to support the value must be provided. Vague comments such as “the market values in the area are increasing†or “subject has been remodeled†are not acceptable.

• Documentation to support the increase: The file must also contain documentation to support the increase in value, such as proof of increasing values for the market, documented home improvements (along with the improvement contracts and receipts). The amount spent to renovate or improve the property does not automatically equate to an equal value increase.

If the property is in an area with a Market Classification 2, 3 or 4, or the appraisal indicates the property is in a declining market: The reason for the increase in values will only be allowed if significant improvements have been made or the borrower purchased the property under a distressed sale or non-arm's length/at-interest transaction and the above requirements have been met to substantiate the amount of value increase for the market.

If the increase is unsupported or the documentation to support the increase is not provided, the decisioner should use the lower of the original documented purchase price, auction/ foreclosure bid/value or the new appraisal value to determine LTV/TLTV/CLTV.

Seasoning is pretty much always an issue these days where there is a higher value within 12 months. Below is the policy Wells has. It is clearly spelled out and it is how most lenders look at it whether they have specific guidelines or not.

Is Fannie Mae HomePath the Right Path?

How the new Fannie Mae HomePath financing program works and how to use it wisely.

The Federal National Mortgage Association (FannieMae) recently announced a new program called HomePath® Financing which allows for special financing on designated foreclosed properties now owned by Fannie Mae. Note that this loan product is only available to those properties currently owned by Fannie Mae. These listings are often designated as potential HomePath possibilities on the MLS listings, and you can also use the HomePath website to confirm whether or not a property is eligible.

HomePath financing is only available through lenders that have specifically been chosen by Fannie Mae.

There are two key features to the HomePath program: (1) it does not require an appraisal and (2) it does not require PMI (Private Mortgage Insurance). It will help finance properties where the appraisal or condo requirements would be a hurdle for other forms of financing. The waiving of PMI will help where a loan approval is possible but no PMI company would write a PMI policy (e.g. condos with less than 10% down). In addition, the HomePath program requires limited down payment â€" 3% for owner occupied and 10% for investment properties.

Just like all Fannie Mae (and Freddie Mac) programs, the HomePath product comes with pricing adjustments. It is certainly not the lowest cost financing available. To better understand this we will break the use down in two groups: 1. Owner Occupied and 2. Investment properties.

Owner Occupied
The main reason to use HomePath for someone planning to purchase a home would be property issues that prevent it from being eligible under other programs. A good example would be a condominium unit with either no condo association or a very low owner-occupancy rate. The buyer would have to put 3% down which compares to 3.5% for FHA or as little as 0% under the some programs. In other words, the down payment itself is no reason to choose HomePath. The cost is higher than under any other program. A buyer putting only 3% down would have to pay a minimum of 3.625 points up front (FICO >719, maximum is 4.875% (660 FICO). However, it is important to note that a 6% seller credit/concession is possible for owner occupied purchases so the points can be covered by that.

Investment Properties
The HomePath program is perhaps the only program that allows for the purchase of investment properties with as little as 10% down (only singles and 2-units; 3-4 require 25%). This really opens a door that has been closed for a while as there appears to be many interested in acquiring real estate as an investment but the down payment is a hurdle. Under this program the current limit of not more than 4 properties financed by same borrower with Fannie Mae is expanded to the “old†10 unit rule. Note that after 4 properties the down payment required goes to 25%. The adjustment for the property being investment is 2.5 points vs. normal 3 points but with less than 20% down the buyer would also have to pay for the no PMI option and that is an additional 1.75 points for a total of 4.25 points. No special treatment for seller credits on investments, standard rules apply.