Are you thinking of buying an investment property?

We’ve been hoping that Fannie Mae might be holding back some REOs until the new program opened:

Buy a Fannie Mae-owned house, and get up to 3.5% credit towards closing costs through Oct., 2011.

Here is a list of Fannie-owned SFRs on the outskirts of NSDCC (Oceanside, Poway, RP, RB, etc.):

Fannie REOs

Favorites on the list include: Carlota, Carmel, Del Diablo, Via Cajita, Warmlands, and Woodshadow.

Only a handful on the list are active listings.  Because the good ones tend to sell quickly, I wanted to give you time to evaluate before they hit the open market – most aren’t listed yet.  There’s no telling exactly when they’ll hit the market, or for how much.

But we know they’ll probably be eligible for HomePath financing – here are the terms:

HomePath Mortgages:     

  • Minimum Down Payment is 3%.
  •  Investor’s minimum down payment is 10% down.    
  • 2-unit properties require 20% down regardless of occupancy.
  • 3-4 units require 25% down regardless of occupancy.       
  • An appraisal is not required. 
  • Regardless of down payment, mortgage insurance is not required. 
  • Most closings can occur within 30 days.    
  • The interest rate is usually .375% higher than market. 
  • The payment on a HomePath Mortgage will always be lower than an FHA payment. 
  • Condos in Arizona, California, Florida, Michigan and Nevada are not eligible.     
  • Minimum credit score is 660 unless the down payment is 20% then the minimum score is 620.  
  • The minimum loan amount is $50,000.  The maximum loan amount is $417,000.
  • The seller can pay up to 6% of the sales price towards buyers closing costs, regardless of LTV.      

HomePath Renovation Mortgages:  

  • Minimum Down Payment is 3% but the fees to do this will exceed 2% of the loan amount.
  •  The sales price on the contract should not include the cost of repairs. 
  • A list of required repairs will not be provided. 
  • The borrower must rely on their inspection. 
  • Sweat equity is not allowed. 
  • Borrowers must hire one credible General Contractor to bid the entire project.
  • Multiple bids are not allowed.  The General Contractor must attend closing.      
  • The repairs are completed after closing. 
  • The minimum down payment for investors is 15%. 
  • 2-unit properties require 25% down regardless of occupancy.   
  • 3-4 unit properties require 30% down regardless of occupancy.    
  • Condominiums, manufactured housing and co ops are not eligible.
  • Renovation funds can be used for cosmetic renovations. 
  • The bid must include all required repairs necessary to bring the house up to average condition.  
  • Barns and pools cannot be added.  
  • $35,000 is the maximum the borrower can escrow, but additional repair costs can be paid in cash.

If we catch a lull in the market, there could be an excess of Fannie Mae listings laying around.

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