Assistance From Fannie and Freddie Programs For Repossessed Homes

Home buyers usually do not get much aide with their mortgage financing.

In fact, they are usually happy just to get a California mortgage. At least one group of borrowers, though, were offered some relief.

Assistance From Fannie and Freddie Programs

Fannie Mae and Freddie Mac, the government-controlled companies that buy mortgages in bulk from lenders, have offered financing incentives for buyers of defaulted homes that Fannie and Freddie own in California and across the USA.

Home buyers had until Oct. 30 to apply to take part in Freddie Mac's SmartBuy program, which began in July and offered up to 3.5 percent of a home's sale price to help cover closing costs.

The program was designed by Freddie Mac in an attempt to aide home buyers with their closing cost expenses. Under the program, the mortgage giant offers to pay up to 3.5 percent or the entire closing costs, whichever is lower for owner-occupied homes.

Owner occupied cash sale homes can receive up to 1 percent for closing costs through the Freddie Mac program. Investors, however, are not eligible for this program

In order to qualify, the home must be a primary residence and must be processed through the foreclosed property section of Freddie Mac's HomeSteps Web site. Also, loans must close by year's end. As an added bonus, the HomeSteps properties also include two-year warranties on major appliances and electrical, plumbing, air-conditioning and heating systems.

HomeSteps is the real property income unit of Freddie Mac and markets a nationwide selection of Freddie Mac-owned homes. The program also includes a comprehensive two-year home warranty on HomeSteps homes. Although the closing cost offer has already expired, the warranty is ongoing.

The incentives for buyers in Fannie Mae's ongoing program were even more aggressive than those offered by Freddie Mac.

Through participating lenders, Fannie offered mortgages to buyers offering a down payment of 3 percent, and these buyers were not required to secure private mortgage insurance. Fannie Mae also offered closing cost assistance to buyers, as long as they negotiate for it.

But, unlike Freddie Mac's, there was no cap to the assistance level. Under the program, the average homeowner has received help as much as 3.75 percent of the home loan value. Until June, Fannie Mae also offered to cover any repairs to the home during the borrower's first half year in the home, up to $3,000. Now, Fannie Mae is considering renewing or changing that program.

Also, in areas hit hardest by the economic downturn that have qualified for federal financing through the National Stabilization Program, Fannie Mae is considering a 15% discount on those properties.

Most of Fannie Mae's foreclosure incentives are offered to shoppers who will use the belongings as their primary residence, or so-known as public entities like Neighborhood Housing Services and other Companies that rehabilitate houses and promote them to proprietor-occupants.

The Freddie Mac program is seen by many industry experts as an effective partnership between Freddie Mac and local real estate agents who market the homes.

The program is essentially for people who have no qualms about purchasing a foreclosed home. The good news is that these homes are usually in good enough shape to move into immediately.

HomeSteps has about 20,000 properties across the nation, with about 40 percent of this total in California. The HomeSteps-Smart Buy and Fannie Mae programs are considered to be a win/win for both Freddie Mac and assisted home buyers. The packages assist domestic shoppers buy homes with some financial assistance; and at the same time it helps Fannie and Freddie promote off a number of its repossessed homes.

Assistance From Fannie and Freddie Programs For Repossessed Homes

However, the program has had it's failures and the large home loan fund providers are looking for more deals before the financial assistance expires.

Thank you for reading the article Assistance From Fannie and Freddie Programs For Repossessed Homes. It feels incomplete if your visit is on a blog Share With Dangstars without leaving a comment. For that, please provide your response in the comment box below. Hopefully the article Assistance From Fannie and Freddie Programs For Repossessed Homes this is useful for you.

Share this post

loading...

Subscribe to the latest article updates via email: