How to Purchase a Home Using Fannie Mae HomePath

Fannie Mae’s HomePath program lets buyers and investors purchase foreclosed homes, but deals come with risks.

Published: 10/16/2025, 9:47:48 AM EDT

How to Purchase a Home Using Fannie Mae HomePath — A "For Sale" sign in front of a home in Arlington, Va., on Aug. 22, 2023. (Andrew Caballero-Reynolds/AFP via Getty Images)

Not all homes are available on the open market. If you’re looking for a bargain that’s a fixer-upper, you might want to work with a bank or government agency. Foreclosure homes can be a great deal.

Fannie Mae often finds itself selling homes directly to homebuyers and investors through its Fannie Mae HomePath program. But how does Fannie Mae end up with these properties, and can the program work for you?

Fannie Mae Government-Sponsored Enterprise

Sponsored by the U.S. government, Fannie Mae provides liquidity and stability to the housing market. It purchases mortgages from lenders and sells them on the open market.

Fannie Mae also works with homeowners to help them understand their options when having difficulties making mortgage payments. But when a foreclosure can’t be avoided, Fannie Mae takes over the property and then uses the HomePath Property Program to sell it.

Fannie Mae HomePath Properties

Fannie Mae HomePath properties are sold directly by Fannie Mae to a traditional buyer or investor. Fannie Mae acquires the properties in one of two ways.

One is if the house has gone through foreclosure, and Fannie Mae owns the mortgage. In this circumstance, Fannie Mae, as the lien holder, now owns the house. The other way is through a deed in lieu of foreclosure. This is when the homeowner surrenders the house and walks away without receiving a foreclosure on their credit report.

In both instances, Fannie Mae takes possession of the property and then sells it through its real estate platform, HomePath Program.

HomePath Program

HomePath is a homebuyer program offered by Fannie Mae. These homes aren’t guaranteed to be move-in ready and may need extensive repairs or renovations. If you go this route, be prepared for some costs.

You don’t have to be a first-time buyer to purchase a home through HomePath. Investors, first-time buyers, and repeat buyers can all participate.

All homebuyers must work with a licensed real estate agent to purchase a HomePath house. Go to the HomePath website to find a house available in your desired area. You can save searches and be notified when there are new listings.

If you’re buying as a resident, not an investor, Fannie Mae’s First Look program lets you submit offers for 30 days before investors can bid on the property. Just look for the First Look icon on the property page. This gives you an opportunity to beat the competition.

Your real estate agent can make an offer on your behalf using the HomePath Online Offer Process.

If you’re not paying cash, you’ll need to qualify for a mortgage.

HomeReady Loan

If you’re buying the house for a primary residence and having trouble with the down payment, the Fannie Mae HomeReady program will help. It offers flexible down payment requirements and an inclusive definition of income to help responsible borrowers in the low-to-moderate income range qualify for a mortgage.

According to Quicken Loans, HomeReady loans require at least a 3 percent down payment of the purchase price. This is lower than the 3.5 percent needed for a Federal Housing Administration (FHA) loan.

With a Home Ready loan, you can cover the down payment with funds from multiple sources. These sources include gifts, grants, second mortgages, and rental property (if part of the property purchased).

Lenders receive a $500 loan-level price adjustment credit when Fannie Mae purchases a loan secured by a HomePath property. According to Fannie Mae, some requirements must be met, one of which is passing the credit to the borrower to cover the appraisal cost.

The HomeReady loan is available through conventional mortgage lenders and offers competitive interest rates.

Downsides to a HomePath Home

Although you may be able to score a deal on a HomePath house, there are some potential pitfalls.

As mentioned, the house is sold “as is.” Fannie Mae doesn’t have to make repairs to issues found during inspection. Therefore, ensure that you have the home inspected and prepare to walk through it if needed.

Fannie Mae doesn’t accept contingent offers. So you might not want to make an offer on a home if you haven’t sold your current home. Otherwise, you’ll have two mortgages.

One of the most significant drawbacks is the lack of disclosures. You won’t have the previous owner disclosing problems with the property. Is there mold? Have the pipes exploded in the past? You won’t know what you’re buying until you’re living in the house.

There’s not always a lot of selection in an area. It depends on the market’s economic conditions. If inventory is scarce, you should expect heavy competition.

Fannie Mae doesn’t accept offers from buyers who haven’t gone through an agent.

Steps to Buying a Fannie Mae HomePath Property

First, find an approved real estate. To buy a HomePath property, you must work with a licensed real estate agent.

Next, you’ll need to be preapproved by a lender. Your financing should be secured before submitting any offers. This way, your final loan approval amount will help strengthen your offer. If you are paying cash, skip this step.

Once you’re approved, look for HomePath properties online.

One requirement of the HomeReady mortgage is completing a homeownership education course through a Housing and Urban Development (HUD)-approved agency. You also may participate in the HomePath Ready Buyer program. This also includes a homeownership education course.

Finally, your real estate agent will help you submit an offer. Once the offer is accepted, you can prepare for the closing.

Fannie Mae HomePath Properties: A Viable Choice

Whether you need an inexpensive fixer-upper for your primary residence or are a house flipper, the Fannie Mae HomePath program may be for you.

However, although there are some advantages from an investment perspective, there also are some downsides. It’s a “buyer beware” endeavor, since you won’t have any history of the house.

The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.

From The Epoch Times