Very attractive Fannie Mae 30 year fixed-rate financing is available for investors who can verify income and put down 25% of the purchase price. Investors can also put down as little as 20%, but the interest rate will be about ¼ to 3/8 of a percent higher.

Properties with severe condition issues, however, may not be eligible for Fannie Mae financing, as repairs will need to be completed before close of escrow. And, coaxing REO sellers to pay for or to even allow repair-work is often difficult.

Hard Money options are available for investors who are unable to verify income, or who wish to buy properties with severe condition issues that cannot be repaired prior to close of escrow. Such loans require a down payment of at least 25%, with rates close to 11% and fees as high as five points.

An excellent option for investor financing for qualified properties, is offered by the Fannie Mae “Homepath” Program. Investors can purchase REOs owned by Fannie Mae with only 10% down, no mortgage insurance and no appraisal requirements.

Owner Occupied Financing

For those looking to occupy the property, FHA financing may be the best option for home-buyers:

• Requires 3.5% down payment
• More flexible than Fannie Mae financing with respect to condition and credit issues
• Competitive interest rates

Standard Fannie Mae financing is also available for owner-occupants with a minimum of 10% down in California. Fannie Mae financing with less than 20% down will require mortgage insurance.