Can Fannie Mae Force HomePath on Home Buyers
by Marcy in Snohomish, Washington and by Natalia in Miami, Florida
Ask Kate if Fannie Mae can force HomePath financing on home buyers and more home buying questions: Marcy and her husband have a contract on a HomePath house, a property foreclosed on by Fannie Mae. Their FHA financing is nearly complete. But Fannie Mae has come back refusing to sign the contract unless they switch to a HomePath Renovation mortgage.
Natalia is buying a home and has 6 questions related to negotiating rates, title fees, and escrow account waivers. She also asks about shopping online for lenders, float downs, and timing rate locks.
Can Fannie Mae Force HomePath Financing on a Home Buyer By Marcy in Snohomish, Washington
My husband and I recently offered on a Fannie Mae HomePath property. Our realtor put under financing 'FHA or HomePath.'
We want to go FHA as our loan process is nearly complete. Fannie Mae has come back refusing to sign the contract unless we agree specifically to a HomePath Renovation mortgage.
Can they do this? I have found three different places on the HomePath website that clearly state financing for the HomePath homes can be any that the buyer chooses.
The listing on the house never said it has to be HomePath or HomePath Renovation financing; just that it's a HomePath property and qualifies for the HomePath Renovation loan.
Thanks so much.
Ask Kate answers: Can Fannie Mae Force Homepath Financing on a Home Buyer
After Fannie Mae forecloses on a property, they have the option of offering it for sale as a HomePath property. Many of these houses are also eligible for special financing terms under the HomePath financing program which boasts low down payment, no appraisal, significant seller-paid closing costs, and no mortgage insurance premiums.
For properties in a moderate state of disrepair, HomePath Renovation financing could also be available. This all-in-one construction loan provides both the financing to purchase and renovate.
However, as you pointed out, Fannie Mae clearly states...
You also can use the financing of your choice from any lender, such as your local bank, credit union or other financial institution.
So here's what I suggest. Call the Fannie Mae Resource Center at (800) 7-FANNIE and ask them why you are being required to switch from FHA financing to a HomePath loan.
Ask them if there is something about the property that won't allow for FHA financing. Because if this is the case, you need to be brought into the loop.
Assuming you've already attempted to get answers from the real estate agent and the mortgage originator, start calling for someone of authority at the bank and the real estate office. Ask them to intercede on your behalf.
I am hoping for a resolution so you won't be left with the difficult decision to switch away from the financing you almost have in place or worse yet, find another home.
More Ask Kate answers to HomePath questions:
30 year Fixed Rate Mortgage - Purchase Financing By Natalia in Miami, Florida
Hi Kate, Thanks for your insight. We are in the process of purchasing a home in Florida. The lender, a bank, is offering us a 30 year fixed rate of 4.5 with us putting 20% down.
Should we open an account with them and do bi-weekly payments, the rate would go down to 4.375%. We would prefer not to escrow insurance and title and they want to charge us .25% for that option.
We have excellent credit and have seen better interest rates quoted online. Our lender asked if we were interested in locking the rates described above, for a 60 day period, which falls within the contract's current closing date. My questions are the following:
1) Is it worth going with an online lender for an improved interest rate.
2) How much negotiation on interest rate may exist with the lender (%).
3) Can we ask for waiver of the 'escrow waiver fee' and at what cost? (Interest rate)
4) The seller is a real estate attorney and will also be acting as the title agent. They have agreed to waive the 'owner policy' fees which were listed as $2200 in the Good Faith Estimate our lender gave us. What fees can we expect to pay to them as well?
5) Once locked, if interest rates should go down, can we unlock, depending on the lender's guidelines?
6) We believe interest rates will continue to decrease. What is your take on this? (We have a contracted closing date of Nov 14.)
Ask Kate answers: 30 year Fixed Rate Mortgage - Purchase Financing
Your questions are laid out quite neatly. You made my job easier!
Before I answer them, I want to congratulate you for buying a house! Now onto the questions.
- I am reluctant to advise home buyers to apply with an unknown lender. I think the best practice is to get a referral from someone you trust, a relative, co-worker, friend, neighbor, or real estate agent.
But many people like to take advantage of the internet to shop for deals. Be careful at going with the lowest rate. Those too-good-to-be-true quotes have a way of coming back to bite borrowers with higher fees.
If you decide to shop online, go first to 6 Steps for Comparing Mortgage Lenders for tips.
- The rate of negotiation will depend somewhat on your qualifications and the amount of business in the pipeline of your mortgage originator.
If you can offer back something that's a time-saver, a complete package of documentation, for instance, (use my checklist for starters), you might be able to negotiate an eighth of a point off the base rate.
- Loan-to-value and the type of mortgage will dictate whether or not your lender will allow you to pay your own property tax and homeowner's insurance. Some lenders charge upfront fees of .25% and others add .125% to interest rates for the privilege.
I have not seen waiver fees waived often at all. But this shouldn't stop you from attempting to negotiate the waiver.
- Although I can break down a Good Faith Estimate and discuss how to reduce closing costs, the best way to know your specific title company charges is to call for a written quote.
- Whether you can float down a locked rate after a drop in the market is dependent on the terms in your executed mortgage rate lock agreement. Terms differ among lenders. It's a MUST to get them in writing.
- My take on the future direction of interest rates has not changed in 25 years. Mortgage rates are guaranteed to go up, down, or stay the same. (You have my word on that.)
Taking it a a step further, I do not suggest to hold out for the very lowest mortgage rate. In fact, until rates start going up, you never know for sure that the market hit bottom.
Furthermore, mortgage rates are generally known to climb faster than they trickle down. So if you can lock an interest rate that is satisfactory to you, get the terms in writing, and don't beat yourself up if they drop lower.
Best wishes in your home buying endeavors,
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