Many people seem to be interested in the Fannie Mae HomePath mortgage program, and one of the most popular questions people have is “how much do I have to have as a down payment?”
In mortgage-speak, how much money you put down when you buy a property is how you calculate what is called a loan-to-value ratio or also commonly referred to as LTV.
As an example, if the sales price of your new home is $100,000 and you put $5,000 down, the loan to value would be 95%.
With the HomePath mortgage loan program, the maximum loan to value allowed by the program depends on what kind of property it is (single family homes have different LTV restrictions than 4 plex’s for example). Also maximum loan to value ratios are different if the property is going to be a primary residence, second home or investment property.
HomePath Mortgage Loan LTV Highlights:
For a single family home that is going to be a primary residence the maximum LTV is 97% (note: this is 95% with some lenders) and require a 660 credit score.
For a fourplex that is going to be a primary residence, the maximum LTV is 75% and a minimum credit score of 580 is required.
HomePath Second Homes
For a second home that is a single family residence, the maximum LTV is 90% and a 660 credit score is required.
HomePath Investment Properties
For an investment property that is a single family residence, the maximum LTV is 90% and requires a 660 credit score.
As you can see – the amount of money that you are required to put down with the HomePath mortgage program can vary widely depending on the type of property you are purchasing and what your intended use is for it. There are many, many more scenarios that will impact your loan to value requirements (read: how much money you will need as a down payment) so be sure to speak with someone who is familiar with the HomePath mortgage program prior to putting a sales contract in!