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HOMEPATH Rates (for Fannie Mae REOs) – Better But Not Great

“Homepath” financing is available solely for the purchase of Fannie Mae Owned REOs. Its biggest advantages are: (1) No Appraisal Requirement, so condition is not an issue; and (2) High LTVs. We have been critical of Homepath, however, b/c rates are often not competitive. But, Homepath pricing has been improving somewhat relative to other financing options. Here are a few scenarios:

Assume a $400,000 Loan Amount; FICO of 740; APR’s 0.25% higher than quoted for a One Point Loan:

80% LTV, OWNER OCCUPIED: 4.75%*

97% LTV, OWNER OCCUPIED: 5.625%** (NO MI REQUIRED)

85% LTV, INVESTMENT PROPERTY: 5.25%*** (NO MI REQUIRED)

*80% LTV pricing is “so so”.

**The 97% Loan is inferior to FHA, even when MI is taken into account; FHA rates are lower than Homepath 97% LTV rates. We only recommend Homepath financing if condition is an issue.

***The 85% LTV pricing is very good for an Investment Property to 85%. We highly recommend this financing option.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167