What Credit Score is Needed for a HomePath Loan?
January 24th, 2012 | Author: Stephanie
[A] HomePath loan is a line of credit offered through Sallie Mae and available through associated lenders. This loan program is designed to allow those with less than perfect credit to qualify for a home loan, and also obtain reasonable terms of said loan. Only certain homes qualify for this type of loan, generally those that have been foreclosed upon, so it is important that you locate eligible properties in your area.
This loan program allows for people with less than stellar credit qualify for a home loan that they can actually afford. The program requires no home appraisal, no mortgage insurance, and only a small down payment is required. This makes home ownership far more accessible, especially for those who are struggling to improve their credit scores. The HomePath program also provides excellent incentives for investment opportunities as well. One of the biggest perks of this type of loan is less strict requirements for the credit score for a HomePath loan.
You can qualify for a HomePath loan, even with poor credit. People with credit scores as low as 580 have been approved for this type of loan, though the terms of the loan are a bit different when your credit score is this low. Ideally, your credit score for a HomePath loan will be at least 660 (FICO score).
Terms of a HomePath Loan
With a credit score of 660 or higher, you can qualify for a mortgage through an affiliated HomePath lender. With a HomePath loan, you are only
required to make a 3% down payment, unless you are purchasing the home for an investment opportunity. Two of the other big perks associated with this type of loan are that there are no mortgage insurance requirements and no home appraisals required.
As noted above, homes that qualify for a HomePath loan are usually those that have been lost due to foreclosure, or “fixer uppers”. There are listings of qualifying properties available through the HomePath website that will allow you to view eligible listings in your area.
HomePath loans can also be used for investment purposes. Many people choose to invest money in real estate, whether to be used as rental property, or to be sold at a later time. To qualify for a HomePath loan as an investor, you need a credit score of at least 700. You are also required to make a 10% down payments as opposed to the 3% needed if the home in question is going to be your primary residence. As with the terms for the residential loan, there are no insurance or appraisals required when securing a loan through this program.
The HomePath loan program is an excellent opportunity for those with less than perfect credit to purchase a home at terms they can afford. With a fair credit rating of at least 660, you can qualify to purchase a house for a minimal down payment, favorable terms, and without as many requirements as there are purchasing a home through a traditional lender. This type of loan is also a great opportunity for those with good credit looking for a solid investment.