Super Cheap Foreclosure Investor Loans Available

For investors who want to grab some great foreclosure deals, but do not have the cash, a little-publicized national lending program is now offering help to finance investor purchases for flips and rentals. Check this out…

• Minimal down payments: 10 percent for investors on first 4 properties, 25% down more than 4. Most of your down payment can come from documented gifts from others with no direct connection to the transaction.
• No requirement for an appraisal on the property unless you’re applying for additional money to renovate the house. This is crucial because lowball appraisals can be deal killers, especially when the house needs cosmetic or other repairs.
• Generous “seller contribution” limits of up to 2% of the price on investor purchases, effectively reducing the cash you’ll need to pay closing costs.
• No requirement for mortgage insurance coverage, despite the high loan-to-value ratio.
• Bad Credit Okay. Credit score minimum of 660, compared to the 700-plus scores many lenders demand for conventional loans on favorable terms.
• Maximum loan amounts tied to standard conventional loan limits: $729,750 in the highest-cost markets, $625,500 in others, and $417,000 everywhere else.
• Loan Costs: Prices with a higher rate than average 30 year conforming loan, approximately 1-3.75% discount points.
• Underwriting: Same requirements as conforming, but without the property issues (appliances missing – no problem).

Who is offering such an unusual package? Fannie Mae, who is saddled with a portfolio of tens of thousands of foreclosed homes it needs to sell. They are now willing to finance their sales to new owners, and has come up with a new financing program, called “HomePath” to do so. In recent weeks, HomePath loans have been rolled out through mortgage brokers and a network of 50 lenders, so it’s probably available in your area.

The basics: HomePath is restricted to Fannie Mae foreclosure holdings. More on Homepath financing here. Fannie Mae properties can be viewed on Foreclosures.com.

There are two main options with HomePath: mortgage financing to buy the house “as is”; and “renovation” financing, where Fannie loans additional amounts for “light to moderate” fix-ups, such as a roof repair or replacing a heat-and-air system.

Listings eligible for renovation financing generally require some work to be funded through add-on amounts to the mortgage that are held in escrow by the lender after closing and disbursed as repairs are completed during the succeeding six months. Maximum rehab amount is $30,000 or 20 percent of the projected “as completed” value of the house.

Interest rates on both options are slightly higher than prevailing conventional or FHA-insured loan rates. When 30-year fixed rates on owner-occupied home loans dropped to 3.88%, HomePath loans with 10% down payments were available at 4.88%.

Wow, that is the cheapest investor money I have ever seen! And if you want to Retire Rich from Monthly Foreclosure
Rental Cash Flow, you must join us this Wednesday in our Brand New Professional Investor Webinar. Details Here or Call 800-310-7730 x2. Talk to you then!