Are you a young renter who hasn’t the slightest idea how to start down the road to home ownership? Are you an anxious parent who would like to push your offspring onto the ownership highway?
If so, the nation’s largest financial institution, the Federal National Mortgage Association, or Fannie Mae, has just the map you’re looking for. It’s a nationwide referral and guidance service called HomePath, and it comes with absolutely no strings attached.
HomePath was developed primarily with low- and moderate-income buyers in mind, people who often have credit problems or other extra hurdles to overcome. But it’s really for anyone who’s hesitant about looking into what it takes to buy a first house.
That’s how Gabe Turner describes himself-“hesitant.” The Maryland resident, in his 20s, had plenty of savings, earned a good living as a lineman with public utility and had outstanding credit. But he feared the process.
In other words, Turner, which isn’t his real name, was an outstanding candidate for homeownership. But he was afraid to contact a lender because he felt he lacked the knowledge he needed to carry on a decent conversation, let alone come to an informed decision.
So he called HomePath’s toll free number (800-732-6643), discussed his situation with a specialist, had his financial situation reviewed and generally put himself onto the right track.
Now he’s a confident consumer. He hasn’t bought a house yet, but he knows exactly what he can afford and what kind of mortgage he wants, and he’s looking.
There are thousands of people like Turner, according to Julie Gould, vice president of community lending at Fannie Mae, people who “think the road to homeownership is full of potholes and speed bumps.”
HomePath is Fannie Mae’s attempt at paving over the road so anyone who needs personal assistance will have a smooth ride, not a bouncy one. “Buying a house shouldn’t be like climbing Mt. Everest or running the Boston Marathon,” says Gould. “It should be user-friendly.”
One of the beauties of HomePath is you’ll never encounter a salesman of any kind until you think you’re ready.
(Although Fannie Mae is the nation’s largest supplier of funds for home loans, you’ll probably never come into direct contact with it, either, at least not as you travel through the home buying process. A private company with a government-directed mandate, Fannie Mae makes sure local lenders have plenty of cash on hand for mortgages by buying their loans, packaging them into securities and selling them to investors.)
Many real estate and loan companies and their trade groups offer courses and seminars for first-time buyers. But they’re often not as well attended as they could be because people dread being confronted by a high pressure agent or loan officer who might try to sell them something they can’t afford or don’t want.
That’s probably not the case, but the perception is there just the same. With HomePath, however, you’ll be linked with someone who is trained to help you through the home-buying process and that’s all.
HomePath specialists have a list of more than 600 local, nonprofit buyer counseling services throughout the country. These organizations aren’t located just in the inner cities, they’re all over. But your name will never be given to any lender or realty agent.
You’ll be sent a list of counseling services available in your state and you can choose which one to call. But if local help isn’t available, a Fannie-Mae trained specialist will provide direct guidance over the telephone in either Spanish or English.
You’ll also be sent a comprehensive “Guide to Homeownership,” a home-study course also available in Spanish that will walk you step-by-step through the entire home-buying process, which, take heart, is often a daunting ordeal for even experienced purchasers.
The guide begins by helping you determine whether you’re prepared financially for ownership.
Can you afford to buy and, if so, how much can you afford? How much cash will you need? How much will you be able to borrow?
Next, you’ll be taken through the house-shopping phase so you can decide what features you want in a house, whether or not you’ll need an attorney and how to choose a real estate agent. Then you’ll learn how to shop and apply for a loan and how the approval process works.
When you finish the concise 132-page book, you’re asked to complete five of the guide’s simple worksheets-your monthly expenses, your available cash and assets, etc.
Upon successful completion of the course, you’ll receive a certificate showing that you’ve satisfied the education requirements for Fannie Mae’s Community Home Buyer’s program.
That doesn’t guarantee you’ll be eligible for a mortgage. But if it turns out you are, the certificate “opens up a whole world of (loan) opportunities,” says Fannie Mae’s Gould.
The community home buyer’s program is for families or individuals earning 100 percent of their Metropolitan Statistical Area’s median income or less.
So it’s possible you’ll need less income to qualify, less cash for a downpayment and less money in the bank to close. And if you want to live in one of the country’s 545 central cities, there’s no income ceiling at all.
So far, all this is free of charge. But for the cost of a credit report, your local or HomePath specialist can plug you into a computer program that enters and stores such personal and financial information as your income, assets, debts and employment and credit histories.
The possibilities are endless, of course. But you won’t know what yours are until you take a few cautionary steps. HomePath can be your guide.
