Help From Fannie and Freddie Programs for Foreclosed Properties
Home buyers are not accustomed to getting much aide with their http://sandiegomortgagegroup.com/index.php/california-home-loan.html [ <a target=]">mortgage refinance. In fact, they are generally happy just to get a California home loan. At least one group of borrowers, though, have gotten a break. Fannie Mae and Freddie Mac, the government-controlled companies that buy mortgages in bulk from lenders, have offered financing incentives for buyers of foreclosed 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 HomeSteps-SmartBuy program, was created on July 17, 2009. The program was designed by Freddie Mac in an attempt to aide families buying a home with their closing cost expenses. Under the program, the mortgage giant offers to pay up to 3.5 percent or the actual closing costs, whichever is lower for owner-occupied homes. Owner occupied cash sale homes can receive as much as 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 chosen from 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 property sales unit of Freddie Mac and is focussed on selling 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 will be 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 http://californiamortgageshop">California mortgages to buyers who made a down payment of 3 percent, and these buyers did not have to secure private mortgage insurance. Fannie Mae also offered closing cost assistance like Freddie Mac, as long as they negotiate for it. But, unlike Freddie Mac's, Fannie's assistance level was not capped. Under the program, the average homeowner has received help as much as 3.75 percent of the mortgage value. Until June, Fannie Mae also offered to cover any repairs to the home during the borrower's first six months in the property, up to $3,000. Now, Fannie Mae is considering whether to renew, or change, that program. Also, in areas hit hardest by the economic downturn who qualify for a loan through the National Stabilization Program, Fannie Mae may discount its foreclosed properties by up to 15 percent. Most of Fannie Mae's foreclosure incentives are offered to buyers who will use the property as their primary residence, or so-called public entities like Neighborhood Housing Services and other organizations that update properties for resale to owner-occupants.
The HomeSteps program is viewed by some industry observers 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 repossessed 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 country, with nearly half of this total in California. The HomeSteps-Smart Buy and Fannie Mae programs are believed to be a win/win for both Freddie Mac and assisted home buyers. The programs help home buyers get financing for home loans; and at the same time it helps Fannie and Freddie sell off some of its foreclosed properties. However, the program has had it's failures and the large mortgage fund providers are looking for more deals before the financial assistance expires.
The HomeSteps-SmartBuy program, was created on July 17, 2009. The program was designed by Freddie Mac in an attempt to aide families buying a home with their closing cost expenses. Under the program, the mortgage giant offers to pay up to 3.5 percent or the actual closing costs, whichever is lower for owner-occupied homes. Owner occupied cash sale homes can receive as much as 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 chosen from 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 property sales unit of Freddie Mac and is focussed on selling 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 will be 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 http://californiamortgageshop">California mortgages to buyers who made a down payment of 3 percent, and these buyers did not have to secure private mortgage insurance. Fannie Mae also offered closing cost assistance like Freddie Mac, as long as they negotiate for it. But, unlike Freddie Mac's, Fannie's assistance level was not capped. Under the program, the average homeowner has received help as much as 3.75 percent of the mortgage value. Until June, Fannie Mae also offered to cover any repairs to the home during the borrower's first six months in the property, up to $3,000. Now, Fannie Mae is considering whether to renew, or change, that program. Also, in areas hit hardest by the economic downturn who qualify for a loan through the National Stabilization Program, Fannie Mae may discount its foreclosed properties by up to 15 percent. Most of Fannie Mae's foreclosure incentives are offered to buyers who will use the property as their primary residence, or so-called public entities like Neighborhood Housing Services and other organizations that update properties for resale to owner-occupants.
The HomeSteps program is viewed by some industry observers 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 repossessed 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 country, with nearly half of this total in California. The HomeSteps-Smart Buy and Fannie Mae programs are believed to be a win/win for both Freddie Mac and assisted home buyers. The programs help home buyers get financing for home loans; and at the same time it helps Fannie and Freddie sell off some of its foreclosed properties. However, the program has had it's failures and the large mortgage fund providers are looking for more deals before the financial assistance expires.
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