What Is a Fannie Mae Property and How Do You Buy One?

A Fannie Mae property is a home acquired and sold by the Federal National Mortgage Association, commonly known as Fannie Mae. Fannie Mae plays a significant role in the housing finance system by purchasing mortgages from lenders, providing capital for more home loans. When a borrower defaults on a mortgage that Fannie Mae owns or guarantees, the property may become a “Fannie Mae property” through foreclosure or other means.

Defining Fannie Mae Properties

Fannie Mae properties are real estate owned (REO) assets that the Federal National Mortgage Association has taken possession of. This occurs when a homeowner with a mortgage backed by Fannie Mae defaults on their loan, leading to foreclosure. Fannie Mae may also acquire properties through a deed-in-lieu of foreclosure, where the homeowner voluntarily transfers the property title to Fannie Mae to avoid the foreclosure process.

Fannie Mae’s mission is to ensure liquidity and stability in the housing market, not to be a long-term property owner. Once a property enters its portfolio, Fannie Mae aims to sell it promptly to minimize holding costs and return the home to productive use. These properties often include single-family homes, townhouses, condominiums, and multi-family homes with up to four units. While some properties might be in move-in ready condition, many are sold “as-is” and may require repairs.

The sale of these properties helps stabilize communities by reducing the number of vacant homes. Fannie Mae often prioritizes owner-occupants, including first-time homebuyers, over investors during an initial “First Look” period, which can last for about 30 days. This strategy supports homeownership and helps to maintain neighborhood stability.

Locating Fannie Mae Properties

The official portal for Fannie Mae’s real estate owned properties is HomePath.com. This website provides a comprehensive listing of homes available directly from Fannie Mae across the country. Users can search for properties by address, city, state, or ZIP code, and apply filters such as price range or number of bedrooms.

While HomePath.com is the primary source, Fannie Mae properties are also listed by licensed real estate agents on various general real estate platforms. It is important to note that offers to buy Fannie Mae HomePath homes must be submitted through a licensed real estate agent; Fannie Mae does not accept direct offers from buyers. Engaging a buyer’s agent who is independent from the property’s listing agent is recommended to ensure independent representation throughout the transaction.

The Purchase Process

The first step in purchasing a Fannie Mae property is to secure mortgage pre-approval if financing, or to prepare proof of funds if paying with cash. This pre-approval demonstrates financial readiness and helps establish a budget for the home search.

Offers for Fannie Mae properties are submitted through a licensed real estate agent, via the HomePath online platform. Fannie Mae encourages buyers to submit their strongest offer, as competitive offers may lead to requests for “highest and best” proposals. An earnest money deposit, ranging from 1% to 3% of the purchase price, is required to accompany the offer, demonstrating the buyer’s commitment. This deposit is held in an escrow account by a neutral third party until closing.

Financing options for Fannie Mae properties include conventional loans, and specific Fannie Mae-backed products like the HomeReady loan, which may allow for down payments as low as 3% for eligible borrowers. The HomePath Ready Buyer program is another option, particularly for first-time homebuyers, offering up to 3% in closing cost assistance upon completion of a homebuyer education course. Closing costs, which typically range from 2% to 5% of the purchase price, cover various fees such as lender charges, appraisal fees, and title insurance. Once an offer is accepted, the closing process usually takes about 45 days, during which the loan is finalized and all necessary documents are prepared.