How to Buy an Investment Property with a 10 Percent Down Payment with no PMI: Fannie Mae Homepath Mortgage

HomepathEDITORS NOTE: Fannie Mae is no longer offering the FannieMae HomePath mortgage program. If you are considering buying a Fannie Mae HomePath property (foreclosure that is owned by Fannie Mae) in Washington state, I’m happy to help you.

Seattle area investors are taking advantage of current lower home prices and are buying rental properties.  One of the issues with investment property is that it often requires a larger down payment and more stringent underwriting guidelines.  However, if you buy a qualified property that is owned by Fannie Mae, the Homepath guidelines will allow as little as 10% down for an investment property with NO private mortgage insurance and NO appraisal.

Mortgage Master Service Corporation’s program requirements for the Fannie Mae HomePath Mortgage Program for investment properties:

  • Purchase transactions only
  • Single Family Dwellings, PUDs and Condominiums allowed
  • Home must be designated a Fannie Mae Homepath property (Fannie Mae Renovation Financing is not allowed).  Make sure properties have the logo shown on this post to be eligible.
  • Minimum mid-credit score of 660.  Risk based pricing (LLPA) applies…the higher your credit score, the better your rate may be.
  • Maximum LTV of 90% (1-Unit properties)
  • Full documentation of borrower (income, employment, assets, etc.).
  • Gift funds not allowed with investment property
  • Maximum financed properties allowed: 4

Here are some highlights of Fannie Mae’s Homepath Mortgage Program for non-owner occupied properties:

  • No mortgage insurance required
  • No appraisal.  Property value is accepted as the sales price.
  • Fixed rate and ARMs (adjustable rates) available
  • Loan amounts up to $417,000
  • Seller/Interested Parties may contribute up to 2%
  • Borrower may qualify with rental income of the proposed property with a bona fide signed lease.

NOTE: RATES QUOTED IN THIS POST ARE FROM APRIL 2011: if you would like a current mortgage rate quote based on your personal scenario on a home located anywhere in Washington, please contact me.

Here’s an example of current rates (effective April 26, 2011 as of 8:30 a.m.) utilizing a 30 year fixed conforming based on a low-mid credit score of 720-739 purchasing a qualified property using Homepath Mortgage with a sales price of $300,000 and 10% down payment:

  • 5.750% priced with 0.498 rebate/credit (apr 5.871).  Principal and interest: $1575.65*
  • 5.500% priced with 0.420 discount points (apr 5.704).  Principal and interest:  $1533.03*

*Property taxes and home owners insurance are additional and there is NO mortgage insurance. Loan amount based on the above scenario is $270,000 with 360 mortgage payments (30 year fixed).

Please click here for a mortgage rate quote based on current pricing and your personal scenario.

At 20% down payment, if you are purchasing a qualified Homepath property, the pricing is currently better than what you would have available using a standard conforming mortgage.  It’s worth checking out this program.

HomepathKC For more information or to find an eligible Homepath property, visit  King County alone currently has 629 properties listed on Fannie Mae’s Homepath site!  

If you’re interested in a Fannie Mae Homepath Mortgage on homes located anywhere in Washington state, please contact me – I’m happy to help you with your financing.  Click here if you would like a mortgage rate quote.


  1. […] you can find a Fannie Mae REO for your next investment property, you can use the Fannie Mae Homepath mortgage program and buy it using only 10% down payment with no private mortgage insurance or appraisal […]

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