Fannie Mae Covers Closing Costs on HomePath Properties

As part of their neighborhood stabilization program, Fannie Mae is offering buyers’ assistance through a couple of different programs, HomePath and First Look.

HomePath

HomePath helps buyers buy covering their closing costs, up to 3.5% of the home’s purchase price.

To qualify, buyers must be purchasing a HomePath property; this is a home that is owned by Fannie Mae, usually as the result of a foreclosure or owner forfeiture.  Buyers need to make the initial offer on the home on or after June 14, 2011, and the purchase must close by October 31, 2011; initial offers made prior to June 14 are not eligible.

First Look

In addition to HomePath program, Fannie Mae also offers an edge to buyers hoping to purchase a primary residence (as opposed to investors, or buyers looking for a second home). Under the First Look program, only offers from primary-residence buyers will be considered during the first 15 days that a Fannie-owned REO property is on the market.

Redfin agents and partner agents are always available to help you make a purchase on a Fannie Mae-owned property.

  • DavidN

    Buying a home with seller paying 3.5% closing costs can be a good thing especially if you are low on cash reserves. But here are some cautions I'd like to give:

    Homepath properties may likely sell the property totally as is, so make sure you are getting a good deal on the price of the house compared to homes that have sellers willing to spend extra to make needed repairs or adjustments. For example, if you are buying with FHA financing and the house doesn't met FHA approval, then the repairs to bring it to code may come out of your pocket and not the seller.

    The full 3.5% closing cost is NOT guaranteed. If you don't have 3.5% worth of closing expenditures then the seller won't credit that. So make sure, between your lender and real estate agent. you work out a plan to generate enough closing costs to use up the full 3.5 closing credits. For example, buying more loan points, and make sure things like house appraisal fees are included.

    Homepath may offer your agent a bonus commission. Make sure you are comfortable with that. And feel comfortable knowing that your agent isn't bias in pushing you into a Fannie Mae home just for the bonus.

    The contract documents of the Fannie Mae/Homepath purchase may be different than your local state documents. There may be some difference in what you get in protection and compensation. Or a difference in the contingencies of certain items, like the time period before you lose your earnest money. Also for example, will the seller pay for additional reports or city/state tax or any recorder or transfer fees. Plus you may have to pay for a mandatory $200 re-key of your house. So talk it over with your agent so that can fully compare what differences if there are any.

    I'm not an agent, but I hope that helps. There are probably some other things to consider as well.

    • BryanHowell

      Thanks DavidN. Those are all excellent points to consider before making a move on a HomePath property.

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