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B5-4.2-03, Loans Secured by HomePath Properties (02/02/2022)

This topic describes exceptions to standard policies that are permitted for HomePath properties and delivery requirements, including:

Eligibility Exceptions for HomePath Properties

A HomePath property is a property that was owned and sold by Fannie Mae through a transaction resulting in the disposition of its real estate owned (REO). When the property secured by the mortgage is a HomePath property, Fannie Mae will allow certain exceptions to standard Selling Guide eligibility policies as described below.

Interested Party Contributions

In cases where the subject property is a HomePath property, an exception to the maximum interested party contribution (IPC) limit for principal residences is permitted, as described in the table below. All other requirements related to IPCs, as described in  B3-4.1-02, Interested Party Contributions (IPCs)B3-4.1-02, Interested Party Contributions (IPCs), continue to apply.

Occupancy Type LTV/CLTV Ratio Maximum IPC
Principal Residence Greater than 90% 6%

Note: DU will issue a message if the amount of the IPC appears to exceed the standard limits described in  B3-4.1-02, Interested Party Contributions (IPCs)B3-4.1-02, Interested Party Contributions (IPCs). (DU does not apply the higher limit even if DU identifies the property as a HomePath property.) The lender must determine whether the subject transaction is a purchase of a HomePath property eligible for the higher IPC limit and document the loan file accordingly.

Certain Resale Restrictions

Notwithstanding any other provision of this Selling Guide, loans subject to resale restrictions imposed by Fannie Mae as the seller of its REO property are eligible.

Special Feature Code for HomePath Properties using the IPC Exception

Lenders must use SFC 679 when delivering a loan secured by a HomePath property if the IPC exception applies to the transaction. This code is in addition to any other special feature codes that may apply. SFC 679 is not required for a loan secured by a HomePath property that is subject solely to the resale restriction exception.

Loan-level Price Adjustment Credit for Appraisals

The lender will receive a $500 loan-level price adjustment credit when Fannie Mae purchases a loan secured by a HomePath property. The following requirements apply:

  • The loan must be a purchase transaction for a principal residence underwritten with DU.
  • The lender must obtain an appraisal for the transaction and pass the entire credit to the borrower to cover the cost of the appraisal.
  • The lender must confirm the seller of the property is Fannie Mae (even though DU may identify the property as a HomePath property).
  • The loan must be delivered with SFC 871.

Recent Related Announcements

The table below provides references to recently issued Announcements that are related to this topic.

Announcements Issue Date
Announcement SEL-2022-01 February 02, 2022