One of the great things about the HomePath Mortgage Loan program is that no appraisal is required by the lender in order to be approved for the loan. However; just because no appraisal is required, doesn’t mean that people won’t want to actually get an appraisal done so they can have the piece of mind that they are getting a good deal on the home they are buying.
For the HomePath mortgage loan program, an appraisal is not required. The value of the property is determined by the contract sales price.
But should you want to obtain an appraisal, here are the rules that will apply:
- You must order the appraisal from an appraiser of your choosing – not one that is recommended by the lender.
- The appraiser must be paid for his services outside of the transaction – it cannot be financed into the loan.
- The lender cannot request a copy of the appraisal. If the borrower provides a copy to the lender, it must be included in the loan file with a note that the appraisal was ordered by the borrower outside of the loan transaction and was not reviewed or approved by the lender.
- The property value reflected in the appraisal will not impact the LTV calculation for the loan.
- The lender must inform the borrower that the purpose of the borrower ordered appraisal and its contents are for the use and information of the borrower only and will not be considered for purposes of the loan transaction.
Do people really order appraisals when getting a HomePath mortgage loan? I haven’t seen it yet, but I am sure it happens. And if you are considering the HomePath program, now you at least know what the rules are regarding appraisals should you decide to order one… on your own of course.
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I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the good work. Look forward to reading more from you in the future.
@MerrY,
Thanks!
Thanks very much for your interesting post. Will be back in the future.
How does this work? Wouldn’t the LENDER want an appraisal to know that the property was worth the money they were lending? Is that why there are only a limited number of lenders available under this program?
@Elaine,
Thanks for stopping by!
The only properties that are eligible for the HomePath loan program are already currently owned by Fannie Mae, so they already “know” what the property is worth.
And since effectively, Fannie Mae is both the seller and the lender – there is really no abnormal risk that I can see.
Hope this helps!
Justin
If you get your own appraisal on a homepath property and the appraised value is less than what you offered, do you have options to renegotiate or reject the property based on your appraisal? Thanks.