Resources for Homebuyers
The Federal National Mortgage Association, more commonly known as Fannie Mae, helps banks and other mortgage lenders provide mortgage loans to homebuyers. While the FNMA does not directly work with borrowers and homebuyers, it does offer resources to guide buyers in their home buying and owning journey. Fannie Mae mortgage loans are primarily for low-income buyers but the tools the association offers can be beneficial to anyone on their home-owning journey.
Fannie Mae offers low-payment options for buyers through the HomeReady program. This program is reserved for families and individuals within a certain income range. FNMA also lists its own acquired properties. These are Fannie Mae foreclosure properties which typically require lower mortgage payments. The HOME by Fannie Mae is an award-winning app created by the FNMA to provide assistance and a visual guide for the home-owning journey.
How to Find Fannie Mae Foreclosures
Fannie Mae foreclosures can easily be found through the HomePath by Fannie Mae online resource. It was created by the association so it offers the most up to date and accurate information on the properties owned by Fannie Mae. Because of Fannie Mae’s large participation in the secondary mortgage market, the association owns more than half of the mortgages in the United States. As such, the FNMA owns many defaulted properties and is able to sell these homes cheaply and for low down payments. You can learn how to find Fannie Mae foreclosures primarily through Fannie Mae’s HomePath in addition to realtor and broker listings.
HomePath by Fannie Mae
Sometimes confused with the HomeReady mortgage, HomePath by Fannie Mae is an online tool that allows prospective homebuyers to learn about buying a foreclosed home. However, there is no HomePath mortgage or loan. Rather than providing a HomePath loan, it offers a search tool. With this tool, buyers can look through the Fannie Mae HomePath property listings. To prepare first-time buyers for the homeownership experience, HomePath by Fannie Mae requires that all HomePath listing buyers complete a homeownership education course. This course is also applicable to the HomeReady mortgage loan.
HOME by Fannie Mae
Fannie Mae provides an easy and modern way for homeowners and prospective buyers to visually see their progress. This app includes:
- A checklist to see buying progress.
- Financial calculators.
- HUD housing counseling locator.
- Housing articles
- Housing listings.
This app is award-winning and provide all the resources and help a new homebuyer would need at his or her fingertips. HOME by Fannie Mae helps families and individuals calculate what they can afford, how to qualify for a Fannie Mae mortgage, estimate savings and find tips on home repairs. HOME by Fannie Mae simplifies a complex and daunting process of buying a home.
Fannie Mae HomeReady Mortgage Loan
The Fannie Mae HomeReady program offers special mortgages to low- to moderate-income homebuyers. This type of Fannie Mae mortgage is meant to serve a diverse market of families and individuals. Qualifications include income limits and minimum as well as achievable credit scores (or no credit score at all). These borrowers benefit from low down payments, cancelable mortgages and insurance, the option to have a co-borrower who does not live on the property and acceptance of rental payments as income. HomeReady mortgage loan options allow a greater variety of buyers to qualify, as they can pool income from different members of the family. However, buyers cannot possess any other home at the time of this purchase such as a rental or second home.
However, before applying for the loan, potential homebuyers are required to complete a four- to six-hour homeownership education course. This kind course instructs new potential homebuyers and owners about the process of buying a home including the vocabulary involved in the process.
A mortgage calculator is a useful tool to use when figuring out what you can afford. Fannie Mae offers an affordability and payment calculator. With this tool, you can input your gross income, any high-cost payments than you currently make (such as a car, credit cards or student loan debt), your estimated down payment and the interest rate of the mortgage. The mortgage calculator then produces the maximum cost of a house that you can afford, your estimated monthly payments and the length of the Fannie Mae mortgage.
How to Decide Between a House and an Apartment
Fannie Mae is for families and singles who are looking to buy a home. However, buying a home is not the best option for everyone. In some situations, it is more ideal to rent an apartment rather than buy a stand-alone house. For example, if you are planning to stay rooted in one area for a while—at least three years—then buying a house might be suitable for you.
Find out everything you need to know about Fannie Mae loans before initiating the homebuying process by downloading our free informative guide.
Homes offer privacy, space and customization. They also often increase in value over time, especially with the right renovations. Homes are most often located outside of busy cities, thus offering a quieter environment. Being able to have as many pets as you want at home can make applying for a Fannie Mae home loan well worth it.
The downside of owning a home, especially a Fannie Mae foreclosure, is that you are responsible for making repairs and maintaining the integrity of the house. While you do not have to do these things yourself, repairs and maintenance can be expensive.
Apartments require lower commitments since leases are often offered for one year. You could move apartments yearly if you wanted to. Thus, apartments are ideal for people who are not planning on staying in one area or city for more than a few years.
Unlike homes, apartments have fewer costs; typically, only the initial deposit and monthly rent payments. With an apartment, you would not have to undergo the process of qualifying and paying for a Fannie Mae loan. Apartments are also typically closer to stores, plazas and restaurants making them a great option for people who enjoy being near populated areas. In addition, repairs and renovations are addressed and paid for usually by landlords, so renters do not have to worry about these expenses.
Mistakes to Avoid When Buying a New Home
It is important when buying a home that you do not settle. When purchasing a Fannie Mae property, or any other property, remember that the neighborhood and neighbors are included with it. You should not move into a home if you are not comfortable in the neighborhood. Do not break your budget just because you fall in love with a home in the moment.
In addition, homebuyers are highly encouraged to complete home inspections of their potential homes especially with a Fannie Mae HomePath property. Buyers who bypass this step can find unexpected expensive repairs down the line. Lastly, homebuyers should always get pre-approved for a Fannie Mae mortgage when purchasing a home. Preapprovals are formal processes that prove to lenders that you truly financially ready and responsible to purchase a home.
Discover more about buying a home including details about qualifying for a Fannie Mae-backed mortgage and the benefits of doing so by downloading our detailed guide.
What is Fannie Mae?
The Federal National Mortgage Association (Fannie Mae) provides affordable housing finance options for homebuyers and renters. Fannie Mae does not provide original mortgages. Rather, the organization purchases existing mortgages and guarantees them with government sponsorship. Fannie Mae mortgages have a fixed rate and can have a lifespan as long as 30 years.
Who is eligible for Fannie Mae?
Fannie Mae guarantees multi-family and single-family mortgages and loans. To qualify for either type of loan, an applicant must have an income lower than the local average, and the property he or she wants to buy must be worth less than the federal maximum. Further, applicants must have a credit score above 620. However, the minimum required credit score may change depending on how many properties the applicant plans to purchase.