Compliments of Chris Safe @ Bell Mortgage
Changes in the mortgage industry happen at a rapid clip – often on a daily basis. Here are some of the most recent changes regarding Fannie Mae and Freddie Mac, the government sponsored enterprises (GSEs) that currently own about 50 percent of all U.S. mortgages.
Fannie Mae owns a division known as HomePath. HomePath works to get buyers into foreclosed properties by offering special incentives such as 3.5 percent closing costs. As of October 31, 2011, this incentive will expire. That doesn’t mean that they’re no longer willing to pay any closing costs; it just means that your Realtor will need to negotiate some form of closing cost assistance as part of the deal.
As of this writing, Fannie Mae still has a FirstLook program. The program gives home buyers, who plan to occupy the property as their own, first chance at making an offer. Investors must wait 15 days before making a bid.
The American Recovery and Reinvestment Act of 2009 allowed Fannie Mae to purchase loans of up to $729,750 (for single-family homes) in designated high-cost areas. Congress continued to extend that limit until October 1 of this year. That loan limit is now reduced to $625,500. This means that a loan of up to $625,500 (in designated high-cost areas) is still considered “conforming” and borrowers won’t be charged “extra” as they will for a jumbo mortgage that kicks in above that limit. For non-designated high-cost areas, the limit is still $417,000. You can access a list of those high-cost areas in this pdf file: http://www.fhfa.gov/webfiles/19489/HighCost_PL111-242.pdf.
Freddie Mac has a division similar to Fannie Mae’s but it is known as HomeSteps. HomeSteps is currently offering the same FirstLook initiative that allows homebuyers the first chance to make an offer on home for 15 days after the initial listing. They are also offering a 2-year home warranty and up to 30 percent savings on new appliances on any newly purchased foreclosures that they currently own.
They are also offering a new opportunity for condo buyers who make an offer by November 15 and close by December 30, 2011 to pay up to $1500 to cover HOA (Home Owner Association) dues. If you have any questions about any of the buyer bonuses that Freddie Mac or Fannie Mae are offering, discuss these details with your real estate and mortgage professionals.
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