Fannie Mae HomePath Mortgage Program or Freddie Mac HomeSteps were created to help Fannie Mae and Freddie Mac sell their REO properties. REO properties are the homes that Fannie or Freddie have repossessed or foreclosed directly, or that have been repossessed by a bank that Fannie Mae or Freddie Mac guarantees.

With so many homes that have been foreclosed, They came up with these Mortgage Programs. The HomePath Mortgage Program that is designed to only be used by a home buyer to purchase a Fannie Mae foreclosed property. As such, Fannie Mae has made the HomePath Mortgage a very attractive home buying loan program.

Features and Benefits of the HomePath & HomeSteps Mortgages

• No Appraisal – the mortgage loan amount in a typical mortgage is based on either the value of the home or the sales price whichever is less. With the HomePath Mortgage the mortgage is based purely on the negotiated sales price. Therefore, no appraisal is required.

• There are no declining market restrictions. With other mortgage programs some metropolitan areas have an extra restriction on home mortgages that accounts for the fact that home values continue to decline due to the large numbers of foreclosures. With a normal mortgage there may be a reduction in the loan amount allowed by 5% to account for the declining market. With the HomePath Mortgage there is no restriction and loan amounts are only limited by the amount of the down payment required.

• Owner Occupied Borrowers only need to put down 3% down payment. You can get this money from a wide variety of sources, unlike a regular conventional mortgage. For example, conventional mortgages do not allow for a gift from a relative to cover your full down payment. You must have at least some of your own money before you can include the gift. With the HomePath Mortgage you can have the gift cover your whole down payment and closing costs. Additional flexible sources for down payment and closing cost assistance can also be considered.

• There are no prepayment penalties allowed.

• You may not have to pay mortgage insurance – also known as PMI or Private Mortgage Insurance.

• Only decent credit is required.

• You can select either a fixed interest rate, adjustable rate mortgage or an interest only mortgage.

• Program is available to real estate investors as well as home buyers and is not limited to first time home buyers.

• You are allowed to purchase up to 10 Fannie Mae REO properties using the HomePath Mortgage.

• Loans my qualify for Ohio's OHFA Mortgage Credit Tax Credit Program

Other restrictions may apply so you will need to speak with your mortgage loan officer about how you can qualify for these Mortgage Programs to purchase a Fannie Mae REO or Freddie Mac Property. Good luck!

American Midwest Mortgage, GetAMortgageNow.com and Tim Bradford are not affiliated with FannieMae, FreddieMac, HomeSteps or HomePath. They only provide information to provide home buyers information regarding this financing option.