HomePath can save money on closing of foreclosure
Potential first-time home buyers who think homeownership is beyond their reach may have a reason to be optimistic, thanks to Fannie Mae.
The governmentsponsored enterprise has launched the “HomePath Ready Buyer” program, which is targeted to firsttimers entering the housing market.
How HomePath Ready Buyer works
The program gives would-be buyers the opportunity to earn up to 3 percent in closing cost assistance toward the purchase of one of Fannie Mae’s HomePath properties, listed on HomePath. com, with a HomeReady loan.
The for-sale properties featured on the website are foreclosure homes owned by Fannie Mae.
According to Fannie Mae, the savings could equal up to $4,500 on a home valued at $150,000.
“Closing cost assistance provides a cushion many first-time buyers need to more confidently face the financial responsibilities of homeownership,” said Jay Ryan, Fannie Mae’s vice president of realestate owned sales, in a statement.
About HomePath HomePath properties have unique characteristics, said Julia Dugger, director of marketing for Fannie Mae. For the first 20 days the properties are on the market, only people who intend to live in one of the homes, rather than purchase it as an investment, are eligible to submit bids.
“For those who are looking at HomePath properties, they have a shot at saying, ‘This is the house I want, and I want to be able to put an offer in on it,’” she said.
Prospective buyers first have to purchase and complete a homeownership education course, which costs $75, to become eligible for the assistance. Fannie Mae reimburses the $75 training cost at closing.
Home buyer education course
The home buyer course, Framework, is self-directed and exceeds the standards set by the Department of Housing and Urban Development and the National Industry Standards for Homeownership Education and Counseling, according to HomePath’s website.
The program was launched in 2013 based on the premise that there’s a more effective path to homeownership, said Danielle Samalin, vice president of homeownership initiatives at the Housing Partnership Network, and Framework president.
“We believe that if and when education is as natural a part of home buying as finding a Realtor, for example, that’s when our communities will be strengthened,” Samalin said.
Several topics are covered, including:
Determining how much house you can afford;
How to decide which home to purchase;
How to choose the best loan;
What to include in your offer; and
What happens at the closing table.
The course is offered in English and Spanish, takes about four-six hours to complete and is entirely online and mobile-friendly, which appeals to many current buyers, including millennials.
“It’s the first generation to have grown up with the Internet and they trust technology, they trust new modes of learning and they value education and they’re looking online for information about buying a home,” Samalin said. “So we created, with Framework, a truly interactive, digital home buyer education tool that’s designed for this generation.”
An alternative path to homeownership
As of December 2015, nearly 12,000 consumers have completed the Ready Buyer program since its April 2015 inception, Fannie Mae’s Dugger said.
“Of that, we’ve had several thousand who have actually gone through, placed offers, won the offer and have purchased a home,” she said.
Those who are still on the sidelines but looking for an entry into homeownership might want to consider the HomePath Ready Buyer program.
“It’s a great opportunity to help get yourself into a home for the first time,” Dugger said.