Two changes have recently been announced by Fannie Mae (FNMA).
One will affect borrowers’ ability to repurchase after a short sale and the other relates to the discontinuation of the popular Home Path Renovation Mortgage.
Longer Waiting Period for Short Sales
Currently, homebuyers who have previously experienced a short sale may have been able to purchase a new home as soon as two years after the date of the short sale, as long as they were able to make a 20 percent down payment.
Effective with loan application dated August 16, 2014, four years will be the required waiting period for anyone who has experienced a short sale. The four-year period will be measured from the date the short sale was completed to the date of disbursement of funds on the new loan. FNMA has indicated there may still be exceptions to allow the borrower to purchase within two years when it is confirmed that the short sale was due to extenuating circumstances.
Discontinuation of FNMA Home Path Renovation Mortgage
FNMA announced that after October 6, 2014 the Home Path and Home Path Renovation loan product will no longer be available.
The Home Path program was attractive to borrowers as there was no mortgage insurance (MI) required for loan-to-value ratios over 80% and it did not require a property appraisal unless it was being used as a renovation loan. Contracts dated prior to October 6, 2014 must close by January/February 2015 (date still to be determined).
Fannie Mae will continue to offer its similar product, Home Styles Renovation. FHA also offers a loan renovation program known as the 203K Renovation Loan, which is also available to borrowers purchasing a property requiring renovations.
Although mortgage programs offered by the government and lenders change, there remains a host of options for homebuyers, such as Home Styles Renovation and the 203K Renovation Loan.
Marimark Mortgage specializes in staying abreast of mortgage products, and helping clients reach their goals. So when you get ready to purchase a home, please contact us to get started with a mortgage pre-qualification.