What is Fannie Mae HomePath?

*As of July 6, 2020, Rocket Mortgage is no longer accepting USDA loan applications.

Home prices are higher than almost ever before, with the median single-family home selling for more than $415,000 in the first quarter of 2025. If you’re just starting out on the property ladder or otherwise looking for an affordable home, it can be difficult to find one.

Fannie Mae HomePath is an option for people who want to try to get a good deal by purchasing a foreclosed home, offering low down payment requirements and other financial assistance. We’ll cover what the HomePath program is, how it works, and how to decide if it’s right for you.

What is the Fannie Mae HomePath program?

The Fannie Mae HomePath program is a housing program that offers financial assistance to people who want to purchase and move into a foreclosed property. The homes involved in this program were either foreclosed on, part of a short sale, or forfeited by their owners.

Let’s cover the key terms:

• Foreclosure: This occurs when someone defaults on their mortgage and the lender repossesses the property.
• Short sale: This is when someone sells their home for less than they owe on the mortgage, usually because they’re struggling to make payments.
• Forfeiture: This happens when a homeowner fails to meet conditions set in the deed or mortgage.

HomePath properties may also have been returned to the lender as part of a deed in lieu of foreclosure deal, where a homeowner gives up their home to avoid foreclosure.

Fannie Mae is a government-sponsored enterprise that buys mortgages from lenders to help keep the mortgage market liquid. It also sponsors programs, like the HomePath program, to help people achieve homeownership.

What is a Fannie Mae HomePath property?

Fannie Mae HomePath properties are homes that are eligible for buyers to purchase through the HomePath program. You can usually find properties such as single-family homes, multi-family homes, or condos available for sale.

Keep in mind that HomePath properties were typically foreclosed on or had owners who struggled to make their mortgage payments. That means the homes may be in disrepair. Fannie Mae may do some repairs or improvements, but be ready to put in some work to fix the house up after you buy it.

HomePath eligibility requirements

The HomePath program is intended for people who are purchasing a primary home. To be eligible, you’ll need to move into the HomePath property as a primary residence within 60 days of closing.

To be eligible, you’ll need to meet these requirements:

• Mortgage preapproval. You must apply for and get pre-approved for a loan sufficient to pay for the property. This usually involves submitting financial documents to the lender of your choice.
• Complete a homebuyer education program. Fannie Mae offers one called the ReadyBuyer Program. It covers the finances behind saving for a home, how to shop for a home, and tips for after you’ve purchased and moved into the home.
• Purchase the home as-is. You need to be willing to buy the property without demanding that the seller make any repairs or changes before you close. Be ready to do some repairs after you buy the home.
• Offers cannot be contingent on the sale of your current home. If you own a home already, you cannot include a contingency that you won’t complete your purchase until your current home sells. You must be able to afford the home without selling your old one. This won’t be relevant for first-time buyers who don’t own a home.
• Work with a licensed real estate agent. You must hire an agent to help you through the homebuying process. Ideally, find one with experience with the program.
• Use Fannie Mae’s HomePath sales contract. Fannie Mae has a standard contract it uses for selling HomePath properties.  You cannot make any changes to it. It’d be a good idea to get a lawyer to review the contract if you need help understanding it.
• Credit score requirements. You need to have a credit score of at least 620 to qualify. Things like your existing debt and payment history impact your score, so try to pay your bills on time and reduce your debt to boost your score.
• Maximum debt-to-income ratio. This is the ratio of your total monthly debt payments divided by your gross monthly income. To qualify, your DTI ratio must be 50% or lower.
• Meet income limits. You may need to have an income below a certain level if you’re using certain Fannie Mae lending programs.

In some cases, there may be contingencies or inspections required as part of the purchase. For example, the seller may come to inspect the home at some point after the sale to make sure you’re truly using it as a primary residence. Working with a buyer’s agent can help you understand all of the contingencies and requirements before you purchase the home. If you are a first-time home buyer, there may be additional programs that can help you.

How to purchase a HomePath property

If you think that buying a HomePath property is right for you, follow these steps.

1. Determine how much house you can afford

The first step for homebuyers is to determine how much home they can afford. You’ll have to factor in your income, housing needs, financial goals, and current level of debt. Common rules of thumb say to keep your housing payment to no more than 28% of your monthly income and total debts to less than 36% of your monthly income.

2. Get preapproved

Next, you’ll want to work with a bank to get preapproved for a loan. This will ensure you can get approved for a mortgage and give you a sense of how much a lender thinks you can afford. It also shows the seller you’re serious about purchasing a property.

If you’re an investor planning to pay cash to buy a house, you can skip this step because you won’t be using financing for the purchase.

3. Find a real estate agent

Real estate agents are professionals who can help walk you through the process of finding and buying a home. The HomePath program works slightly differently than buying a home that’s using a standard listing agent. That means it’s important to get a Fannie Mae-approved realtor who has experience with the HomePath program to walk you through things.

4. Look for HomePath properties

The best way to find HomePath properties is to use Fannie Mae’s online database of HomePath homes. You can search for homes based on things like location, price, or size.

Work with an agent to filter your results to find a home that’s in your budget and fits your needs. Your agent may also be able to help you estimate the cost of any necessary repairs.

5. Complete the buyer education course

Fannie Mae’s ReadyBuyer program is a closing cost assistance program that can help some first-time homebuyers. Benefits include a down payment as low as 3% and up to $2,500 in credits for closing costs for low-income buyers.

Completing an education course is part of the process of qualifying for these benefits.

6. Get a home inspection

Before you submit your offer, it’s important to work with an experienced home inspector to examine a home. Inspectors can help you identify minor and major issues that can affect a home’s value and give you an estimate of the cost of repairs.

Usually, buyers will do inspections after making an offer on a home, but HomePath homes are different. You’ll want to do an inspection before making an offer. Keep in mind that the homes are sold as-is, so you’ll want to factor repair cost estimates into your offer, reducing the price if you can expect to pay a lot for repairs.

7. Make an offer

Finally, it’s time to make an offer to buy a home. Work with your real estate agent to determine how much to offer and put together an offer letter. The offer letter will include any terms you want to negotiate and closing cost assistance you’d like to ask for.

If the offer is approved, you’ll move on to the closing process, where you officially purchase and pay for the home.

Benefits of buying a HomePath property

The HomePath program offers a number of advantages that may sound appealing.

• Some conventional loans will only require a 3% down payment if you buy a home through the program.
• You can also use a VA or USDA loan if you’re eligible. These have no down payment requirements. Currently, Rocket Mortgage does not accept USDA loan applications.
• You can get up to 3% of the home’s purchase price in closing cost assistance from Fannie Mae.
• Because these homes were foreclosed on or may be in distress, HomePath homes are usually cheaper than other homes on the market.
• HomePath properties are safe from title claim issues and liens because they have already been foreclosed on.

Drawbacks of buying a HomePath property

HomePath properties aren’t right for everyone, so it’s important to keep their drawbacks in mind when deciding whether to try to buy one.

• Homes are sold as-is and there is no guarantee of their condition. You may buy a home in need of significant repairs.
• Because they are sold as-is, you can’t ask the seller to make repairs before buying a HomePath property.
• Most HomePath properties are in non-prime locations.
• First-time buyers get the first chance to purchase HomePath properties. Investors need to wait a few weeks before they have a chance to make an offer.

Is a HomePath home right for you?

If you’re not afraid of putting in some DIY work to fix up a home and want to get a good deal, a HomePath home might be a good fit.

For example, first-time buyers who need to find a cheap house, don’t have significant savings to pay for closing costs, and have experience with home repairs are great candidates for buying a HomePath property. They have a good chance of finding a home at a low cost and can handle any of the maintenance issues that arise.

On the other hand, someone looking for a turnkey home that’s in great shape probably isn’t a good candidate for buying a HomePath property.

FAQ

What does HomePath financing look like?

Fannie Mae aims to make financing for HomePath homes affordable. These mortgages have low down payment requirements, and you can qualify for closing cost assistance. Keep in mind that you may need to pay for private mortgage insurance.

Don’t forget to look for state and local housing assistance programs that can give you further help with affording a home.

How can you find HomePath homes?

Fannie Mae’s HomePath website offers a search tool that you can use to find eligible properties. You can filter listings based on location or details like their size or number of bedrooms. The site also lets you view listing photos, schedule tours, and contact agents.

The bottom line: HomePath could be the key to your first home

If you’re struggling to come up with the money to afford an expensive home and large down payment and aren’t afraid of putting a bit of elbow grease into a property, the HomePath program could be the key to buying your first home. It offers as-is properties at lower-than-market prices with valuable closing cost assistance for low-income buyers.

If you’re not ready to commit yet, check out these resources from Rocket Mortgage^® to learn more about the home-buying process. If you think you are ready to buy a home, you can get started with an online application to begin your home-buying journey.