You're going to have a lot of questions that deserve answers. Sometimes we can be helpful, other times you're going to need local professionals familiar with your file, the home you're interested in and the local market.
FHA can be used on any home and many condos. HomePath is strictly for a few homes that FannieMae has taken back as a repossession. HomePath homes may have some clean up and even improvements done to them. Last I knew a HomePath loan didn't require mortgage insurance, but the rates were slightly higher.
When you find a home, if it qualifies for HomePath your lender can run both scenarios for you to see if there is a clear benefit. To state absolutely one is better without the specifics of the home, price and your goals probably doesn't make sense.
I believe you can get Welcome Home Illinois with Homepath as well. I am happy to double check. However, Homepath is ending in early October 2014, so you need to have your offer in, if not accepted by Fannie Mae, by 9/30/14. Also, the lender must be approved to offer Welcome Home Illinois, which my company is.
As far as which one to do, another key is the condition of the property. Homepath doesn't require an appraisal or mortgage insurance, so condition isn't part of underwriting. If the property you are targeting is Homepath approved and needs work, your only options are the Homepath financing program or a Renovation program, allowing you to financing the repair costs. Fortunately, I can offer the 3 major renovation programs available: Fannie Mae HomeStyle, Fannie Mae Homepath Renovation and FHA 203k. Fannie Mae will not repair the home so it meets Fannie Mae or FHA guidelines prior to closing.
I would be happy to help further. Feel free to contact by phone (847-815-8229) or email (email@example.com) at your earliest convenience.
Thank you. Larry Bernstein. NMLS# 280597.