REO Foreclosure Loans and Great Options for Buying with 5% Down

Buyers interested in purchasing foreclosed properties or buying with limited down payment money have two excellent, under-the-radar programs to consider: HomePath and MyCommunityMortgage. Both programs are through Fannie Mae and provide huge advantages over more standard loan offerings.

Fannie Mae HomePath
Bank owned foreclosures, sometimes referred to as REOs or Real Estate Owned properties, are properties that did not sell in the initial foreclosure auction and which reverted back to the original lender or investor. Foreclosures can offer bargain shoppers fantastic deals and, as one of the largest investors in mortgages with millions of foreclosures on its books, Fannie Mae is a great place to begin the hunt.

When Fannie Mae owns the note on a foreclosure, the property is listed on www.homepath.com. Buyers can search the site by state and county to find current listings for properties, often at rock-bottom prices. Listings in Marin are generally scarce and one should check the site frequently and be positioned to move fast on an offer. Surrounding counties usually provide many more properties to choose from. Financing for HomePath REOs is found through a select group of approved lenders and both the rates and terms are extremely good. Here are a few highlights of the HomePath program:

• Up to 95% Financing for Primary Residence; 90% for Second Homes; 85% for Investment properties!
• No Mortgage Insurance!
• No Appraisal.
• Wide range of amortizing and Interest Only ARM loan products.
• Gift funds can be used.
• Conforming and High Balance Conforming loan limits.
• 660 Credit Scores accepted.

Fannie Mae MyCommunityMortgage
This program is open to any property and is available to borrowers whose income is within 140% of the median income for the county in which they plan to buy. 95% financing is available and Mortgage Insurance is offered at a much lower cost than on FHA loans. Although FHA loans require slightly lower down payments and are more lenient with respect to credit score and income allowances (as long as one qualifies) they are more expensive. Borrowers with limited money down and whose income fits within the program guideline's range might find MyCommunityMortgage loans to be a better option. The program also has interest only ARMs and 40-year fixed mortgages for those preferring more affordable payments.

Feel free to contact me with questions on these and other innovative loan programs.

Nicholas Ballard is both a mortgage broker and banker specialized in the residential Marin market.  For assistance, please call or e-mail:

Nicholas Ballard: 415-526-1941; [email protected]
Real Estate Financing
CA Dept. of Real Estate #01356374
California Mortgage Advisors, Inc.
CA Dept. of Real Estate #01170868
Redwood Highway, San Rafael 94903