Fannie Mae's HomePath program includes guidelines and special offers for owner occupants. Owner-occupant buyers must sign an affidavit that certifies they will occupy the home as their principal residence within 60 days of closing and for a minimum one year after purchase. Their owner occupant certification is added to the real estate purchase addendum and becomes part of the sales contract.
First Look Program
Fannie Mae offers its First Look feature as part of the HomePath program. Designed to promote home ownership and help stabilize neighborhoods, First Look allows owner-occupant buyers to bid on foreclosed properties before these listings are available to non-owner occupants and investors. The First Look window is 15 days from the day a home is designated as a HomePath property, although in Nevada the window is 30 days. Those considering homes for vacation or part-time occupancy are considered investors and are ineligible to submit bids during the First Look period.
Public Funds and Entities
State and local housing authorities can also bid on properties during the First Look period and are eligible for financing assistance. Owner occupants can receive earnest money using public funds, such as those offered by the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program. For example, buyers need have only $500 earnest money to purchase a HomePath property through that HUD program. State or local governments sometimes offer grants to help with down payment funds for owner-occupant home buyers.
Owner Occupancy Rules
HomePath occupancy rules are purposely simple to encourage buyer activity on homes owned by Fannie Mae. Owner occupants must move in within 60 days after purchase and occupy the home as their principal residence for at least a year. This guideline gives owners excellent flexibility to manage or change their residency status without forcing the homeowner to occupy the property for the long term.
Owner occupants have guidelines that deliver multiple financing benefits. Among the money-saving features available are no lender-required appraisal, down payments as low as 3 percent and no mortgage insurance needed for a loan-to-value exceeding 80 percent. Home buyers can choose fixed-rate, adjustable-rate or interest-only loans. Fannie Mae also waives some of the complex condo project requirements for HomePath property buyers.
Standard mortgage qualification rules apply. Your projected mortgage payment, including property taxes and insurance, should not exceed 28 percent to 30 percent of your regular monthly gross income. Your total debt, including the new mortgage, should not exceed 36 percent to 38 percent of your regular monthly gross income. HomePath financing also permits approval if your credit is less than perfect. Down payments can come from your own funds, gifts, grants or loans from nonprofit organizations, state or local governments or your employer.