Sometimes here in Phoenix and in other parts of the nation, you will come across a home for sale that will encourage you to use “Homepath” or “Homesteps.” Let’s look at “Homepath” first. This is a program for homes owned by Fannie Mae. Naturally, they need to change their inventory, so they are trying to make the home buying process as streamlined as possible. No appraisal is required as they have supposedly appraised the house fair on the market, although that doesn’t mean you have to offer full price – haggle. A 3% down payment is common, although the seller can contribute up to 6% of the purchase price toward closing costs. In addition, investors can buy buildings of 1 to 2 units with only a 10% discount.

“Homesteps” is a similar program offered by Freddie Mac for the houses he owns (REO). They are trying to combat the notion that foreclosed homes are ruin (often damaged at the hands of spiteful homeowners) and will slightly remodel a property to improve its chances of sale. Typically that would include fresh paint, carpet, and in some cases new appliances.

Finally, you can find a program, from non-governmental lenders, called “Express Path.” Supposedly, they are pre-inspected, pre-appraised, low-closing cost, ready-to-buy homes. Of course, all those services are paid at the sale price, there is no free lunch. This allows for a quick shutdown, but for whose benefit? Some processes do not need and should not be rushed. The industry’s fondness for this program appears to be mixed. Remember, a one-stop shop rarely benefits the buyer, as savings are not passed on, but rather retained, as earnings.

Warning emptor!