Fannie Mae HomePath Financing
The Fannie Mae HomePath program is an attraction solution for financing condos and townhouses. Many people are familiar with HomePath's attractive features for all types of properties: down payments as low as 3% of the purchase price, seller contributions up to 3.5% of the purchase price, no mortgage insurance required. However, there is an added benefit for condos in that Fannie Mae waives the appraisal and guarantees financing without regard to the status of the condominium homeowner's association (HOA). Condos are increasingly difficult to finance as new rules from the FHA have cut off financing eligibility for the great majority of condominium associations. As reported in the Washington Post ("FHA rules for condo purchases are causing major headaches for buyers and sellers"), less than 10% of condo HOAs whose FHA eligibility had expired have been recertified.
Accordingly, buyers of condominiums who aren't paying all cash should either inquire about the FHA eligibility of a condo complex before making an offer or positively seek out only Fannie Mae owned condos to take advantage of these attractive financing features.
A client of mine recently got a HomePath loan approved at 4.5% interest for 30 years. Fannie Mae contributed 3.5% towards his closing costs. I believe he put down 7% in order to bring the loan amount down a bit to a level he could qualify at.