To keep renting... or buy a Fannie Mae Homepath Property?

[Lis]

My landlords have asked that I leave sometime in September/October. One of them is in ailing health and and since my apartment is all on one level, they want to move him there. My 'lease' (legally I'm currently month to month but had verbally agreed to a year) ends in June. I had been hoping to stay put through January since I'd likely have enough for a 20% down payment for a co-op in the area, but you can't always get what you want. After watching my mom struggle for the past three years trying to figure out the best place for her mother, I understand the desperation of trying to do what's best for an aging and ailing loved one.

Anyway, I'm trying to figure out my own next step. Since chances are I won't have the $20k saved by Sep/Oct, I was wondering what I should do now. Right now there's only one apartment available for rent in my price range in my area (want to stay in town - I work here too). I'm hoping more will open up, but they tend to go fast. Pickin's are slim!

One option I'm considering but clearly need to learn more about is a co-op in one of my choice buildings that's available for sale through Fannie Mae Homepath. It's been on the market for over a year (though looking at the history, seems to be unoccupied for about three) and they're asking the market rate. The pictures they show are from Sep. 2013, so clearly old, but like I said, still when it was unoccupied. Now I've read that they stopped offering the Fannie Mae Homepath mortgages, but that it's still possible to provide a low down payment (3-5%) without PMI. The building itself is a very nice building with sound financials and I'd be happy to live there.

Warning bells are going off... if the apartment is nice and it's apparently so easy to get a mortgage... why hasn't it sold? Other apartments in the building that are put on the market are sold fairly quickly (3-4 months) and everyone I've spoken to in the building loves it. All I keep thinking is clearly, something has to be wrong with it.

I have an email out to my realtor but she's on vacation until mid next week. Just wanted to see if anyone had experience with Fannie Mae Homepath and advise me to either pursue it or run away quickly.

[YTProphet]

I'd reassess your comps as to its value. I'm in real estate and pay close attention to Fannie Mae Homepath properties and they're almost invariably overpriced. Fannie's overpricing is usually successful, too, because there are so many people in your shoes who need the 3% downpayment help that they can't get elsewhere so they jump on Homepath properties despite the fact that they're overpriced.

[redbirdfan]

Two things come to mind if the building's financials are in order: 1) Is the unit remodeled?  I've looked at co-ops in my area (much lower prices), but remodeling can be a nightmare.  You generally have to get the board's approval, the architect for the building's approval and you usually have to have an architect draw up your plans.  The professional input adds up to 50% to what a comparable remodel would cost in a condo or SFH.  2) What is the history of the unit?  Has it gone pending at all?  If so, this could indicate that the board is picky about who they approve to move in.  Other issues to look out for are the reserves, age of the building (is there asbestos/lead paint?), sublease policy, pet policy and parking.  With a co-op, EVERYTHING is subject to board approval.  A co-op can be a great deal with the right board and the right building, but it can also be very trying.  I opted for my apartment.       

[Lis]

Thanks for your responses!

YTProphet - Other similar units in the building have sold in the mid 70s. The last unit sold (to my knowledge) sold for low 80s, but that had a very nice updated kitchen and bathroom. This one's priced at 67,900, 'priced to sell,' according to the bio. Based off the pictures (which, again, are a year and a half old), the wood floors are in good condition, it seems nicely painted, the appliances seem good (nothing fancy but I don't need fancy). Looking at comps in the same building and other buildings in the area, this seems fairly priced. Unless it's been completely trashed in the past year and half. Since it's been unoccupied, could Fannie Mae go in and strip the appliances and whatnot?

redbirdfan - I'm hoping there's no need to remodel. If the pictures show an accurate description, it seems move in ready (if anything, I might want to remove carpet in the bedroom, but I'll fight that battle if it comes to it). Otherwise it seems very nice. Reserves are good, they've made at least one major update in the past few years without increasing the maintenance fee. I've seen the rules and regulations of the building and they're all things I'm fine with (no dogs, cats are fine. One parking space. Can rent after a year of occupancy). I'm more concerned about Fannie Mae's involvement.