HomePath vs. 203k streamline...which is right for you?
There are many new loan programs that have been introduced recently and it can be difficult for a home buyer to know which one is right for them. There are many misconceptions about some of these programs which makes it even more difficult. What I would like to do today is briefly describe the difference between two of the more popular loan programs so you can decide what might be the best fit for you.
The first of these programs I would like to mention is the HomePath. For those of you who have been receiving my notes for a while, you may have read about this before. The HomePath is a program that has been rolled out by Fannie Mae. It has been designed to assist Fannie Mae sell more of their REO properties. As an owner occupant of the property, it can be purchased with as little as 3% down and there is NO mortgage insurance required which will save a lot in monthly expense. They also do not require an appraisal on this home. I don't think they really want to know what it is worth
Fannie Mae also offers this program for investors. An investor can qualify for this loan with a little as 10% down, no appraisal and they do not have to pay for mortgage insurance either. This is a fantastic way to assist an investor who is looking to maintain more of their personal liquidity.
Now comparing these to the 203k, there are many differences. The 203k can come in two different packages and is only for owner occupants. The standard 203k is really meant for major rehab jobs that may even include foundation issues. It has a standard draw process for the rehab money. The 203k streamline is really a good alternative to someone who just needs to fix up a property but does not want to do a complete rehab job. It has a simplified easy to use draw and can be used for cosmetics only. You are not limited to Fannie Mae homes and qualify in a similar manner that you would with any FHA style loan.
Neither the HomePath or the 203k have very stringent qualifying factors.
Information courtesy of Matt Redding