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.