Hawaii Fannie Mae Home Path Loans

What Does it All Mean?

You have probably seen this logo on for sale signs, fliers, on foreclosures, in the paper, on the MLS (multiple listing services) and, yes, even blogs. You might understand the basics of this loan, but did you know there are 3 different types of Home Path loans?

I didn’t, until we got into the depths of the loan process with my clients and, believe me, many in the lending industry are just as confused. I now understand all 3 of them and I would like to share all of these 3 loan options with you. Maybe it will give you a new perspective and save you from the head throbbing I encountered.

Before we dive into the 3 loan types, and assuming this is not a cash offer, we need to clarify if/or which loan is applicable to the property. I have to say, this is where the confusion begins. Some properties qualify for only 1 type of loan, while other properties may qualify for multiple loan types using the . This is another good reason why working with a Realtor and qualified lender to verify the property eligibility is so important. Grab your pens, take notes, here we go!

3 Home Path Loan Types

1. Properties with this logo are eligible for special financing that includes: A low down payment (at least 3 percent) can be by your own savings, a gift, a grant, or a secured loan from a nonprofit organization, state or local government, or employer. No appraisal required, no mortgage insurance. Available for primary residences, second homes, and investment properties.
2. Properties with this logo are eligible for special financing for light to moderate renovations and include: One loan to fund both your purchase and light renovation. Low down payment, (at least 3 percent) can be by your own savings, a gift, a grant, or a secured loan from a nonprofit organization, state or local government, or employer. No mortgage insurance, and need appraisal. Available for primary residences, second homes, and investment properties. You might also hear this called a rehab loan. The obvious benefits for this loan are you can finance the funds for the renovations. A big plus in buying foreclosed properties. The work must be done by a licensed contractor and be complete in 3 months.
3. Properties with this logo are manufactured housing and are eligible for special financing that includes: Low down payment, (at least 3 percent) can be funded by your own savings, a gift, a grant, or a secured loan from a nonprofit organization, state or local government, or employer. No appraisal required, and no mortgage insurance. Available for primary residences, second homes, and investment properties.

Lava Zones

So, by now you think you probably understand the different loan types, and have chosen the loan and property that will work for you. Wait, there’s one more thing to consider if you plan on buying a property on the Big Island of Hawaii. It’s called “lava zones.” Because this island is divided in lava zones and your lending institution will factor in the lava zone for the risk factor, most lenders won’t lend in lava zone 1 or 2. But wait, the property says it qualifies for the .

Confused? I had my best lenders tell me no way will your client get a in lava zone 1. After 20 plus phone calls and 3 days, I was able to find a lender to lend in lava zone 1, with a .

If you would like more information on Home Path properties, contact me, Tara Kelly, RS, (808) 542-6014. I am always learning more in this changing market. For Home Path loans, contact Rowena Tom at Open Door Mortgage at affloans@aol.com.

View my favorite Big Island Foreclosures.