Key Takeaways
- HomePath offers foreclosed homes at potential discounts to buyers.
- Buyers don't need to be first-time buyers to use HomePath.
- Fannie Mae offers a $500 credit for using a conventional mortgage.
- Ready Buyer program provides a 3% cash contribution for closing costs.
Article Summary
HomePath is a home buyer program for purchasing foreclosed and short-sale homes. Homes for sale under the program are not guaranteed to be [move-in ready](/learn/what-is-a-move-in-ready-home) and may require extensive repairs. Buyers should be prepared for potential renovation costs.
Fannie Mae HomePath is a foreclosure-sale program that lets home buyers purchase foreclosed or distressed homes at potential discounts, depending on property condition and market trends.
What Is Fannie Mae HomePath? Definition and Benefits for Home Buyers
HomePath is a home buyer program for purchasing foreclosed and short-sale homes. Homes for sale under the program are not guaranteed to be move-in ready and may require extensive repairs. Buyers should be prepared for potential renovation costs.
You don't have to be a first-time home buyer to use Fannie Mae HomePath. The program is available to first-time home buyers, repeat home buyers, and real estate investors.
In exchange for purchasing a HomePath home, Fannie Mae offers mortgage incentives to eligible buyers, including a $500 closing cost credit for using a conventional mortgage to finance the home. Buyers should confirm eligibility for these incentives with their lender.
In addition to the $500 credit, some buyers may qualify for Fannie Mae's Ready Buyer program, which provides a 3% cash contribution toward mortgage and real estate closing costs, or $3,000 per $100,000 in the purchase price, subject to eligibility. Use our mortgage calculator to see how this credit affects your monthly payment.
To qualify for HomePath Ready Buyer, home buyers must:
- Be first-time home buyers
- Complete a homeownership education course
Fannie Mae's 3% Ready Buyer contribution can apply to mortgage closing costs, title insurance and appraisal fees, state and local taxes, and mortgage discount points. Before applying, compare mortgage lenders to ensure you're getting the best rates on your HomePath purchase.
HomePath properties may include condos, townhomes, single-family homes, and multi-unit homes.
Fannie Mae HomePath Requirements
The HomePath purchase process is standardized because, with every HomePath purchase, the home seller is a government agency, and purchasing a home from the government differs from buying from a neighbor or a For Sale by Owner.
Your offer to purchase a HomePath home may not be contingent on selling your current home
Fannie Mae does not accept offers for HomePath homes contingent upon selling another home. Buyers may not delay their HomePath closing while waiting for proceeds from another sale to transfer into a bank account.
Other contingency clauses, including mortgage, appraisal, and home inspection, are considered on a case-by-case basis.
You must be willing to close on your HomePath home within 60 days
Fannie Mae requires HomePath home buyers to move into their newly acquired home within 60 days of closing and live in the home as a primary residence for at least one year.
Occupancy exceptions are granted on a case-by-case basis. Common reasons for exceptions include:
- Out-of-area job transfers
- Family illnesses and deaths
- Unexpected changes in family status
You must use a real estate agent to present your HomePath purchase offer
Fannie Mae is not a real estate brokerage and does not accept purchase offers directly. Offers to buy Fannie Mae HomePath homes must be submitted through a property's listing agent or via the Fannie Mae website.
Home buyers are strongly encouraged to hire a buyer's agent different from the agent representing Fannie Mae on selling its foreclosed home. Real estate agents cannot equally represent both parties in a transaction, as a selling real estate agent's first responsibility is to the seller.
Using the same real estate agent as the seller is a classic first-time home buyer mistake.
Your real estate agent must use Fannie Mae's version of the real estate sales contract
Fannie Mae has a standardized HomePath sales contract. The agency requires it. Standardized contracts help Fannie Mae evaluate offers and accept bids for foreclosed homes quickly and efficiently, which helps keep home prices competitive.
You must be pre-approved for your mortgage before making a financed offer on a Fannie Mae HomePath home
Except for buyers paying cash for a home, Fannie Mae does not accept offers on HomePath homes without an accompanying mortgage pre-approval.
A mortgage pre-approval letter confirms that the buyer is financially qualified to purchase a home at the listed price.
You must agree to purchase the HomePath home "as-is."
Fannie Mae sells HomePath homes "as-is," which means that the agency does not guarantee that the home for sale is free of defects. Many HomePath homes, however, are in good condition. The agency updates homes to ensure they meet local building codes.
In its HomePath sales contract, Fannie Mae highlights potential risks, including mold damage, insect infestation, and lead paint. Fannie Mae strongly recommends that buyers hire an independent home inspector and consider purchasing a home warranty, if available.
You must complete a homebuyer education program
Fannie Mae requires that HomePath home buyers complete an online education program and pass a straightforward home buyer assessment exam. The course consists of seven web-based modules, accessible via desktop, tablet, or mobile.
How to Buy a HomePath Property
To buy a HomePath property, home buyers must follow a standardized process designed to help Fannie Mae sell more foreclosed properties quickly and efficiently.
1. Get Pre-Approved To Buy A Home
Getting pre-approved to buy a HomePath home is the first step toward purchasing a Fannie Mae foreclosed property. A pre-approval shows that you are financially prepared to buy the home for sale at its listing price.
Home buyers should avoid shopping for homes before completing a pre-approval. Pre-approvals establish a budget and framework for finding suitable homes to purchase. It's recommended to get pre-approved first.
2. Find a HomePath property on the Fannie Mae website
Once you're pre-approved, search the Fannie Mae HomePath website for available properties. Buyers can search by state, city, postal code, or address, and use filters to sort by price, bedrooms, and other features.
3. Hire a real estate agent to represent your offer
Fannie Mae requires home buyers to submit offers through a licensed real estate agent. Buyers may not represent themselves. It's a good idea to hire an agent with experience in HomePath offers who does not also represent the seller (Fannie Mae).
4. Complete an approved mortgage education course
For buyers using Fannie Mae's Ready Buyer closing cost assistance program, completing the agency's free seven-module online education course is required. Buyers must pass an assessment exam with a score of 80% or higher.
5. Submit and negotiate your offer to purchase
Buyers must register on the HomePath website to submit an offer. A valid offer requires proof of mortgage pre-approval and, if applicable, a request for closing cost assistance. Fannie Mae encourages buyers to make their best and strongest offer.
