Fannie Mae just announced new incentives for homebuyers (and realtors) that I thought was worth passing on. Fannie Mae is what’s known as a government-sponsored enterprise (GSE) that adds liquidity to the mortgage market by buying certain home loans. By buying up loans, Fannie Mae puts money back into the mortgage market so banks can lend more money to homebuyers.
With the downturn in the home market, however, has come a record number of foreclosures. To help move this inventory, Fannie Mae just announced two incentive programs, one for homebuyers and one for realtors.
- Homebuyers: Through October 31, 2011, Fannie Mae is offering homebuyers up to 3.5 percent of the final sales price to put towards closing costs. This incentive applies only to buyers who plan to live in the home. Investors do not qualify.
- Agents: Fannie Mae is also offering real estate agents a $1,200 bonus who represent the owner occupant buyer (again, sales to investors do not qualify).
Now as you would expect, there are terms and conditions that must be met. You can find all of them at HomePath.com, which is a site run by Fannie Mae to sell its foreclosure inventory. Here are some of the more noteworthy conditions (but be sure to check out all of them):
- Buyers and/or selling agents (the agent representing the buyer) must request the incentive upon submission of initial offer.
- Initial offer must be submitted on or after June 14, 2011 and close by October 31, 2011. Initial offers made prior to June 14 are not eligible for the June 14 – October 31 incentive.
- Sale must close on or before October 31, 2011. No exceptions will be made to this deadline. (Note: Initial offers submitted after September 15, 2011 may not close by the incentive deadline of October 31, 2011.)
- Buyers must be purchasing a HomePath property to use as their primary residence to receive closing cost assistance. Second homes and investment properties are excluded from the incentive.
- Buyers with total closing costs under 3.5% are not eligible to receive the difference as a credit.
Other Fannie Mae Incentives
Fannie Mae offers other incentives to homebuyers as well. For example, Fannie Mae offers what it calls HomePath mortgages and HomePath renovation mortgages. You can get details on both here. One of the main features of these incentives is a relatively low down payment.
Finding a HomePath Home
Searching the HomePath inventory is easy. You can find the search page at HomePath.com. With today’s mortgage rates and home values at historic lows, it’s a good time to buy. And having purchases several foreclosures as investments, I can tell you that you’ll find some very nice homes to consider.