HomePath Renovation Mortgage Financing

House and Money

HomePath Renovation Mortgage financing allows some home buyers to finance a home that needs light to moderate renovation. The mortgage loan will include funds to pay for the home's purchase price and the renovations. For some buyers, this is an opportunity to fix up a home with potential.

A Fannie Mae Program

HomePath is Fannie Mae's REO, or real estate owned, division. Properties owned by Fannie Mae, due to repossession, foreclosure, or abandonment may be part of this division. The goal of HomePath is to help sell these properties. You can view a list of the current available homes for sale through this program by visiting the Fannie Mae HomePath website, where you can also find properties available throughout the country using an easy-to-use search tool on the site. These homes may or may not be well priced. Use a real estate agent and your own lender to purchase this type of home.

When you arrive at the website, notice those homes featuring the HomePath Renovation Mortgage logo on the listing. These homes qualify for a unique program to help encourage the sale of the property.

A homebuyer purchasing a home that qualifies for a HomePath Renovation Mortgage may borrow more than the home's value as-is. This type of loan allows the homeowner to purchase a home that needs repairs and to finance the repair work cost into the mortgage amount. The buyer then has one loan that includes the costs for renovation and purchase. The buyer may purchase up to 35 percent of the completed value of the home, as long as that amount is under $35,000.

The HomePath Renovation Mortgage is a service offered by Fannie Mae. However, borrowers will need to find a Fannie Mae-approved lender to apply for and obtain the loan from rather than contacting Fannie Mae directly. To find a lender, visit the HomePath Mortgage Renovation website

Benefits to HomePath Renovation Financing

As a borrower, the HomePath Renovation Mortgage can help to pay for the moderate renovations a home needs. Each scenario is different, but there are benefits to some homebuyers choosing this type of loan.

  • The loan has a low down payment but it must be at least three percent.
  • Choose the type of terms right for you between a fixed-rate or an adjustable-rate mortgage.
  • You can fund the down payment from savings, grants, loans from a nonprofit organization, gifts, or your employer. In addition, funds from a state or local government agency may also qualify.
  • The loan does not require mortgage insurance. This may lower the borrower's overall costs.
  • Use this type of loan for the purchase of a primary home, second homes, or properties meant for investment.
  • You may be able to waive condo project requirements by using this loan.

These benefits may not apply to all circumstances. They may change over time, too.

Before Using the Mortgage Program

The HomePath Renovation Mortgage is only available to homes that qualify. To find out if the home qualifies, check with your Fannie Mae-approved lender. This information is available on the listings, in most cases. 

  • All buyers should use a real estate agent to handle the purchase of a home under the HomePath program since it requires extensive legal documentation and processing. Only an agent can place an offer on this type of loan, according to Fannie Mae.
  • Prior to using this program, the borrower should consider all types of funding options. In some cases, the HomePath Renovation Mortgage may not be the most affordable method of purchasing the home.
  • The program may not require a home inspection prior to receiving financing, but it is something buyers should consider. A home inspection can find potential problems with the property before the sale occurs.
  • Lenders must provide a full cost workup displaying the cost of this type of loan. This includes closing costs and other features.

Before buying a home with this program, be sure it provides for your specific financial needs. In some cases, these properties may sell for a low amount, but this is not always the case.

HomePath Renovation Mortgage Financing