Fannie Mae Offers Helping Hand to Foreclosure Buyers

The largest U.S. mortgage-financing company, Fannie Mae, is offering an unusual incentive to any qualified buyer wishing to purchase one of their foreclosed properties -- as much as a 3.5 percent in closing-costs assistance or an equivalent amount in appliances.


The offer is good through May 1, said officials at the D.C.-based company. Terry Edwards, Executive Vice President of Credit Portfolio Management, described it as a win-win situation.

In a time when the housing market is flooded with foreclosed properties, company officials hoped the incentive, along with the federal home tax credit, would get more buyers looking. The federal program currently offers new home buyers a home tax credit of up to 8000 dollars and existing homeowners may claim a credit of up to 6500 dollars when they purchase a new residence.

The federal home tax credit is only available on houses purchased by April 30, 2010 and closed by June 30, 2010. Many analysts believe that with mortgage rates predicted to rise, now is the time for qualified buyers to act and take advantage of the federal government incentive.

Currently Fannie Mae has a stock of foreclosures that increase during a three-year housing slump when home prices crashed. Edwards said the incentive is designed to foster sales in a still-weak housing market.

He said attracting qualified buyers and reducing the inventory of foreclosures are essential to "stabilizing neighborhoods and helping the market recover."

Eligible properties are listed on HomePath Web site, which would not only include detailed information about a property for sale, but also information about the community and nearby schools. The company also has properties that are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers home buyers an opportunity to purchase with as little as a 3 percent down payment.

Fannie Mae sold 89,691 foreclosed homes in the third quarter, up from 39,864 in the previous period, according the company's recent quarterly filing. Fannie Mae had 72,275 such homes, called real-estate-owned properties, as of Sept. 30.