Fannie Mae just announced that it will help buyers purchase REO (lender owned) properties by providing up to 3.5% in closing costs through the HomePath program. In order to qualify buyers must submit their initial offer on or before April 11, 2011, with a mandatory closing date before June 30, 2011.
The main restriction for this new program is that the home being purchased must be the buyer’s primary residence, so no lenders can get in on this deal. A few states are even offering small bonuses to buyer’s agents if they close escrow on one of these properties by June 30.
By offering this incentive Fannie Mae is recognizing that we need to stimulate the housing market in order to bring it back to a normal stabilization. It also helps to get the amount of lender-owned inventory off the market. Typically these properties are priced well, usually lower than the comparables; and in most situations the lender has gone in and spruced up the home, oftentimes with new paint, carpet or appliances. This really is a good deal for buyers to get a home at a good price with financial assistance in closing costs.
To see which properties are Fannie Mae properties in your area visit HomePath.com for a complete list. Many of these properties also qualify for special mortgages through HomePath Mortgage and HomePath Mortgage Renovation financing–these could provide an opportunity to complete your purchase with as little as 3% down.