Fannie Mae is trying to reduce their inventory of foreclosed homes, so to increase buyer demand, they are offering buyers up to 3.5% in closing costs assistance on all offers on HomePath-eligible post-foreclosure sales through June 30, 2011.
For that REO (“Real-Estate Owned”) inventory, Fannie Mae is currently offering buyers up to 3.5% in closing cost assistance through June 30, 2011. The HomePath property buyer must meet the following qualifications to be eligible:
Buyers and/or selling agents (the agent representing the buyer) must request the incentive upon submission of initial offer in order to be eligible.
The initial offer must be submitted on or after April 11, 2011 and close by June 30, 2011. If an initial offer was made prior to the effective date, the offer is not eligible for the incentive.
The sale must close on or before June 30, 2011. No exceptions will be made to this deadline.
Only buyers purchasing a HomePath property as their primary residence may receive up to 3.5% in closing cost assistance. Second homes and investment properties are excluded from the incentive. (HomePath properties are still often very good deals for investment properties; among other things, they are one of the only types of properties that investors can purchase while putting down as little as 10%.)
Buyer must sign and Owner Occupant Certification Rider to the Real Estate Purchase Addendum; this is basically just to confirm the “primary residence” requirement above.
If a buyer’s total closing costs are under 3.5%, the difference will not be available as a credit to the buyer.
Note again that this incentive must be clearly identified on the purchase contract, and these loans must close by June 30, 2011.
Before you put an offer in on a HomePath-eligible property, it’s important that you understand what HomePath financing is. We’ve got a a primer on HomePath financing, but if you still have questions, or want to get prequalified to purchase a HomePath home, let us know.
Are you interested in finding HomePath-eligible properties? We can also help you find a buyer agent who is experienced with HomePath properties, or you can start your search yourself online on the HomePath website.
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Doug
on Apr 14th, 2011
@ 4:10 pm:
This is interesting. Do you know if Fannie Mae will provide cash back to cover closing costs? And if so how much? thanks
sweth
on Apr 14th, 2011
@ 4:16 pm:
Doug — As per the info above, Fannie will NOT allow buyers to get cash back, but WILL cover closing costs up to 3.5% of the purchase price. So if a buyer was purchasing a $200,000 HomePath property, and their closing costs were $9000, then Fannie would cover $7000 of that $9000; if that same buyer’s closing costs were $5000, however, then Fannie would cover the full $5000 but would not give the extra $2000 to them as cash back.
Chuck
on Aug 30th, 2011
@ 9:56 am:
Do you know if fannie mae will cover closing costs up to 3.5% if I pay all cash for the house?
Thanks!
sweth
on Aug 30th, 2011
@ 9:59 am:
Chuck — My understanding is that the offer to pay closing costs is not dependent on how (or if) the buyer is financing the purchase. Just make sure that you negotiate for that subsidy as part of your original purchase offer. If you need an agent to help you with that process, let us know and we’d be glad to help you out or put you in touch with someone who can.