Fannie Mae Extends Incentive to Buy Their Distressed Home Inventory

Fannie Mae announced onrnTuesday it is extending its buyer incentive program beyond thernoriginal expiration date at the end of this month.  The program is available to borrowers who purchase a Fannie Mae owned HomePath property and intend to owner-occupy.   Homes for sale include single-family houses, condominiums and town houses that have been taken over by Fannie Mae as delinquencies and foreclosures rose.

The program, which will nowrnexpire on June 30, 2010, offers buyers of Fannie Mae owned properties listed on the HomePath.comwebsite who close by that date a rebate of 3.5 percent of the purchase price ofrnthe house. The rebate can be used toward closing costs, a choice of selectedrnWhirlpool appliances, or a combination of the two at the discretion of thernbuyer. The incentives were initiated in January and were advertised as a complementrnto the federal homebuyer tax credits available to both first-time and move-uprnhomebuyers.  Those programs expire at thernend of April although buyers have until June 30 to complete their purchases.

“We are happy with thernresults of the program, which has helped us to sell properties quickly, therebyrnstabilizing neighborhoods and property values,” said Terry Edwards, ExecutivernVice President of Credit Portfolio Management.

The HomePath website listsrnFannie Mae-owned homes for sale nationwide, and a quick visit to the site demonstratesrnwhy the corporation is offering incentives; it has a huge backload ofrnproperties.  Some 62,000 properties arernlisted on the site including single-family residences, condomiums, andrntown-homes.  There are, for example, 466rnhomes listed for sale in Iowa, 305 in Connecticut, 3,840 in Georgia and 8,595rnin California.  Reuters reported thatrnFannie Mae recently stated that it had over 86,000 homes in its portfolio.

Many of the HomePathrnproperties are also eligible for HomePath mortgage financing or renovationrnfinancing.  The mortgage financing allowsrndown payments as low as 3 percent without mortgage insurance and those fundsrncan come from gifts, grants, or a loan from a non-profit or government organizationrnor an employer. The loans have flexiblernrate structures including fixed rate, adjustable rate and interest only; are availablernwith reduced credit guidelines and both owner-occupants and investors canrnqualify. The renovation mortgages offer the same benefits but will providernadditional financing for “light renovation” and are available tornowner occupants only.  

While retail loan officers were initially the only group of originators able to write this loan product, mortgage bankers and brokers are now finding more investors willing to participate. Again this program applies to Fannie Mae HomePath properties only.

MORE DETAILS ON HOMEPATH FINANCING FROM FANNIE MAE

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