For Michelle Marshall, the road to home ownership turned out to be a path.
In December, she closed on a Tarpon Springs bungalow she found through the HomePath program of the Federal National Mortgage Association, better known as Fannie Mae. The 1,870-square-foot house lured her with its two fireplaces, a vaulted ceiling and, at $124,000, a price well below the appraised value.
"It's a really a unique house,'' said Marshall, who shares it with her two teenage children. "I love this house.''
Marshall is exactly the type of buyer Fannie Mae wanted when it launched HomePath in 2009 to unload the nearly 180,000 homes it acquired after borrowers defaulted on their federally insured mortgages. A government-sponsored, publicly traded company, Fannie Mae uses the proceeds of HomePath sales to purchase mortgages from banks, freeing lenders to make more loans and keep the housing market humming.
A related goal is to encourage home ownership by people like Marshall.
"Selling to owner-occupant buyers contributes to neighborhood stabilization and reduces taxpayer losses,'' said Keosha Burns, a Fannie Mae spokesperson.
All of Fannie Mae's foreclosed properties are listed on homepath.com, a website that has soared in popularity as 3 million visitors a month — investors, real estate agents and home-seekers — scour it for bargains.
No fee or registration is required to use the site, which can be searched by Zip code, city, state, size and price range. Most listings include several photographs and a brief description. Some houses have been repaired and spruced up: Others are in decidedly "as-is'' condition.
In the first three months of this year, 6,200 properties in Florida and 32,000 nationwide sold through HomePath. Current Tampa Bay listings include a three-bedroom house in Spring Hill for $49,900, a four-bedroom cottage in Gulfport for $92,900 and three-bedroom, three-bath condo with a water view in Tampa's Channelside district for $464,900.
Buyers can get those and other properties for as little as 5 percent down with no appraisal or mortgage insurance required. All listings have a 20-day "First Look'' period in which offers are accepted only from nonprofit organizations and owner-occupants.
After 20 days, investors like Barry Bass can jump in.
"You've got to look around a lot to find a good deal,'' said Bass, a Tampa real estate broker. "The restrictions on Fannie Mae foreclosures make it a lot more difficult for guys like me to make money.''
To discourage "flipping,'' buyers are not allowed to resell the property within three months for more than a certain amount, typically 115 percent of the purchase price. Violations can bring warnings letters and fines.
Sticking to the rules, Bass's Badger Investments turned modest profits on more than a dozen HomePath properties it has bought and resold since 2013. One not-so-hot deal: A 60-year-old Clearwater house that Bass purchased for $20,500 only to discover after closing that it needed major work.
"It was a terrible house,'' he recalled, "with a lot of problems I didn't see when I went in to inspect it.'' He later flipped it to another investor for $24,600.
Some investors have resold HomePath houses within hours of buying them, pricing them at slightly under or exactly at the maximum amount allowed.
Records show that Bradenton-based Sterling Transactions did same-day flips on seven HomePath properties in Hillsborough County. Among them: a house near Temple Terrace that Sterling bought for $18,750 on April 16 and sold that day for $22,500, the top price permitted.
Sterling's manager didn't want to comment.
Speaking generally, real estate broker Irwin Wilensky disapproves of instant flips.
"During the 10-day inspection period (investors) will put signs out in the neighborhood, even throw it on Craigslist trying to find someone to flip it to,'' he said. "They've tied up that property and taken it off the market.''
Then, if they fail to find a buyer, they back out of the deal citing problems with the inspection.
Wilensky's SunRaye Realty handles about 300 bank-owned homes and condos in the Tampa Bay and Orlando areas. About 80 percent of those are properties available through HomePath and the smaller HomeSteps program of the Federal Home Loan Mortgage Corp., commonly called Freddie Mac.
Wilensky said he prefers to work with first-time buyers who plan to live in the house. But as HomePath's inventory shrinks and the economy improves, buyers have become choosier.
"What happens is that oftentimes they go looking for (foreclosures) and find out they'd rather spend 20 grand more on a house with granite counters and upgrades,'' Wilensky said.
HomePath properties usually sell the fastest in upscale areas like St. Petersburg's Old Northeast that have had relatively few foreclosures. A house in Riverview, hard hit by the foreclosure crisis, can sit for weeks.
Asking prices, which are based on appraisals and brokers' opinions, typically hold firm during the 20-day First Look period. Then it's common to see "price reduced'' next to a listing.
That's what happened with the Tarpon Springs house that Marshall bought in December. While awaiting money from the sale of her previous home in North Carolina, she kept an eye on the three-bedroom, two-bath house as the price plunged to $119,900 from $146,9000, roughly the appraised value.
A frenzy ensued. "As soon as I put in an offer,'' Marshall recalled, "they said they had multiple offers and to put in my best and highest.''
She bid $124,000 and won.
"It was definitely a fair price. What the house appraised at, I never would have been able to get it.''
Contact Susan Taylor Martin at firstname.lastname@example.org or (727) 893-8642.