With the recently released Fannie Mae HomePath renovation mortgage, I have seen plenty of people ask the question:
"Which is better, the HomePath renovation mortgage or the FHA 203(k) loan?"
Because there are quite a few houses that are owned by banks, many of these properties need a little work done before they can be lived in. Surely, you have seen the stories of what some homeowners have done to properties before they vacated them in the foreclosure process.
FHA 203(k) Streamline or HomePath Renovation Loan?
The answer to this question is "it depends" -- and while the FHA 203(k) loan may be a great option, you may also be eligible for the new Fannie Mae HomePath renovation loan. They are very similar programs -- and while it is close, I personally think that the HomePath renovation loan may have more advantages over the FHA 203(k) streamline program because it require less money down, no appraisal, and no mortgage insurance. Here are just a few of the highlights for the FHA 203(k) Streamline and the Fannie Mae HomePath renovation loan programs.
FHA 203(k) Streamline Loan Highlights:
The FHA 203(k) Streamline loan has been around for years -- but with recent numbers of bank owned properties being bought that need a little work, this loan program has become hot again. Some of the highlights of the FHA 203(k) Streamline loan include:
Fannie Mae HomePath Renovation Loan Highlights:
The newest loan program for homes that "need a little work" is the Fannie Mae HomePath renovation loan. The HomePath renovation loan is only for homes that are currently owned by Fannie Mae. Because Fannie Mae currently owns so many homes, this is one way that they are helping people get into homes whether it be a primary residence, a second home or even an investment property. Some of the HomePath renovation loan program highlights include:
With the inventory of homes so high at Fannie Mae, it is no wonder that they came out with this great program. I wouldn't expect it to be around forever -- so don't be surprised if the program goes away once Fannie Mae sells many of the homes it currently owns.
So Which Loan Program Is Better?
When people ask me which loan program is better, I usually answer it something like this: