Fannie Mae HomePath®: Ways to Find Homes for Less

Homes for sale are in short supply these days. That’s why it’s wise to find alternative home listings from what you’ll see on popular home listing sites.

One such source is Fannie Mae HomePath^®, an online portal that provides properties for sale that Fannie Mae has acquired through foreclosure, deed in lieu of foreclosure, or forfeiture.

What is the Fannie Mae HomePath^® program?

HomePath^® is Fannie Mae’s online portal that offers real estate-owned properties obtained by Fannie Mae via foreclosure, deed in lieu of foreclosure, or forfeiture. 

But HomePath^® used to be the name for Fannie Mae’s HomePath^® mortgage program, which has since been replaced by the HomeReady mortgage loan.

“The HomePath^® program doesn’t provide loans anymore. It’s now an online program through which you can search and purchase foreclosure properties owned by Fannie Mae,” says Nadia Evangelou, director of forecasting for the National Association of Realtors.

Homes on the HomePath^® portal, which are listed exclusively for sale on HomePath.fanniemae.com, include detailed descriptions, photos, and special financing options that can help prospective purchasers claim an available HomePath^® property.

“This Fannie Mae program is designed to provide financial assistance and possibly closing cost reimbursement for buyers seeking to purchase and move into a foreclosed home,” explains Jason Gelios, a Realtor in Southeast Michigan.

However, you do not need to use a Fannie Mae loan to purchase a Fannie Mae HomePath^® home. You can also use a Freddie Mac conventional loan, or an FHA, VA, or USDA loan.

Fannie Mae states that its goal with HomePath^® is to “support neighborhood stabilization, which includes prioritizing sales to owner-occupants and selling properties in a timely manner to promote stability and minimize the impact to the local community.”

These available homes appeal to all types of buyers, including first-time homebuyers, move-up buyers, those seeking a vacation or second home, and investors looking to flip or rent a property.

“Buyers can find a wide range of home types through HomePath^®, from single-family homes to condominiums and townhomes in various locations across the country,” Evangelou says.

Note that HomePath^® also includes other active listings of homes for sale not owned by Fannie Mae.

Related reading: Can’t Find a House to Buy? Here’s What to Do, From a Lender’s Perspective

Fannie Mae HomePath^® benefits

Fannie Mae HomePath^® provides several plusses that make it a valuable portal for home seekers.

“One of the main advantages of purchasing a foreclosed property is that these homes are priced below the market rate. Buyers may be able to purchase bigger homes using the HomePath^® portal that they couldn’t afford elsewhere,” Evangelou explains.

Also, HomePath^® offers exclusive opportunities.

“Fannie Mae acquires these homes out of foreclosure and acts as the seller for the property. That means these homes will not be listed in foreclosure records or traditional real estate listings – you can only find them through HomePath^®,” says Martin Orefice, CEO of Rent to Own Labs in Orlando.

Among the other perks of shopping for a HomePath^® home, Fannie Mae offers unique financing options that make it easier to purchase and afford an eligible dwelling. These include a:

• Fannie Mae HomeReady Mortgage that enables you to put down just 3%, the funds for which can come from grants, gifts, or other sources that don’t necessarily have to come from your personal savings
• Fannie Mae HomePath^® Ready Buyer Program, which provides up to 3% in closing cost assistance to first-time buyers of HomePath^® properties who complete Fannie Mae’s HomeView education course

“One of the main advantages of purchasing a foreclosed property is that these homes are priced below the market rate. Buyers may be able to purchase bigger homes using the HomePath^® portal that they couldn’t afford elsewhere.”

Nadia Evangelou, director of forecasting for the National Association of Realtors

The downsides of choosing a home via Fannie Mae HomePath^®

Fannie Mae HomePath^® can be a great resource for homebuyers. But it’s not without its drawbacks.

“As with any foreclosed home, you are purchasing the property as-is. In other words, there’s no guarantee the home is in great condition,” cautions Gelios.

It also means that you cannot request any renovations or repairs to be made when you submit your offer.

“Consequently, you need to make sure you have some extra money in your budget if potential repairs are needed,” recommends Evangelou.

Additionally, the home may not be in the most popular neighborhoods. And fierce competition exists for these lower-priced properties, from other homebuyers and from investors who will buy and renovate them, then rent them out or sell them for a profit.

Furthermore, you need to qualify for a mortgage loan if you don’t plan to pay cash for the home (which most first-time homebuyers don’t).

Want to take advantage of the HomeReady mortgage and Ready Buyer program perks? In that case, you aren’t allowed to have owned a house within the last three years, and you are required to use the property within 60 days after closing as your primary residence.

How to purchase a Fannie Mae HomePath^® property

Before attempting to locate and purchase a HomePath^® property, you’ll need to create an account (which you can do by clicking the “sign up” link on its home page).

Other than that, the process for buying a HomePath^® property is fairly straightforward. You’ll need to get preapproved, after which you can schedule tours of the homes that interest you.

You can schedule home tours through the Fannie Mae HomePath^® site or by contacting the listing agent for the selected property. Your real estate agent can also arrange a showing for you.

After you go under contract on a home, the homebuying process will proceed as it would with any other type of property. Your lender will process your loan application and schedule an appraisal. This is also when you’ll want to schedule an inspection so you can start getting estimates for any repairs you plan to make to the home.

Note that you aren’t required to use Fannie Mae’s selected title, settlement, or escrow company—you can choose these entities yourself.

Frequently asked questions

What does it mean when a property is a Fannie Mae HomePath^®? Fannie Mae HomePath^® homes are properties obtained by Fannie Mae via foreclosure, deed in lieu of foreclosure, or forfeiture. These previously owned homes now in the possession of Fannie Mae are listed for sale on the HomePath^® website.

How do you qualify for a Fannie Mae HomePath^® property? Anyone can buy a Fannie Mae HomePath^® property. You’ll need to create a free account on the Fannie Mae HomePath^® website, but otherwise the homebuying process is similar to buying any other property.

If you do not plan to pay cash for the home, you’ll need to get preapproved for a home loan with a mortgage lender. To qualify for Fannie Mae’s 3% down mortgage options, you will need a credit score of 620 or higher and you will need to be a first-time homebuyer (meaning you have never owned a home or have not owned a home in the past three years).

What credit score do you need for Fannie Mae HomePath^®? You’ll likely need a credit score of at least 620 and a debt-to-income ratio of less than 50% to qualify for a HomePath^® property, according to Nadia Evangelou with the National Association of Realtors.

Is Fannie Mae HomePath^® still available? Fannie Mae HomePath^® now refers to Fannie Mae’s online portal with listings of homes it acquired through foreclosure, deed in lieu of foreclosure, or forfeiture. Previously, Fannie Mae HomePath^® referred to a mortgage loan option of the same name. However, Fannie Mae relaunched that option as Fannie Mae HomeReady in 2014 and created the Fannie Mae HomePath^® listing portal, which is still available today.

The bottom line

The Fannie Mae HomePath^® portal opens up new possibilities for homebuyers, especially those who are on a budget in a tight market. But it’s important to go in with eyes wide open.

While the listing prices on these homes may be lower than others you’ll see in the market, they may also need a lot of work. But purchasing a home sooner rather than later will allow you to start building equity now while you renovate over time.

*Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation, which has not been reviewed by underwriting. If you have submitted verifying documentation, you have done so voluntarily. Final loan approval is subject to a full underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal.