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Home buyers usually do not get much aide with their home loan financing. In fact, they are generally happy just to get a California mortgage. 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 purchasers of defaulted homes that Fannie and Freddie own in California and across the USA. Home buyers had until Oct. 30 to apply to take advantage of Freddie Mac's SmartBuy program, which began in July and offered as much as 3.5 percent of a home's sale price to help cover closing costs. Freddie Mac's 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. With the program, Freddie Mac offers to pay as much as 3.5 percent or the entire 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 SmartBuy 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 estate 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 mortgages to buyers who made 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, Fannie's assistance level was not capped. Under the program, the average homeowner has received payments equivalent to 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 property, 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 for buyers who will use the property as their primary residence, or so-called public entities like Neighborhood Housing Services and other organizations that rehabilitate properties and sell them to owner-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 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 homes. However, the program has not been a total success and the large home loan fund providers are looking for more deals before the financial assistance expires.
Article Source: http://www.mycontentbuilder.com
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