Fannie Mae s one of two government-backed mortgage enterprises responsible for ensuring the liquidity of the mortgage market. The recent economic meltdown resulted in a lot of government bailouts. These bailouts were not just limited to banks but also to the real estate sector; to Fannie Mae and its twin, Freddie Mac. The resulting effect was tighter controls on the institutions leading to even more foreclosures flooding the market. All of a sudden, people who were once considered prime purchasers were not unable to meet the steep conditions set by the institutions and could not qualify for housing loans.
The direct result of this is that even though there are now more foreclosed properties on the market than ever before, there is even less buying going on because getting a housing loan is now a rigorous process for prospective purchasers.
Probably as a result of this and other developments in the real estate sector, Fannie Mae recently released a couple of incentives geared towards homebuyers and realtors. These are financial incentives provided on sales of HomePath properties and run through October. According to a press release by Fannie Mae on June 11, the goal of the incentives is to stabilize neighborhoods and is only available to buyers who intend to purchase as a primary residence.
For homebuyers, the incentives offer up to 3.5 percent of the final sales price to put towards closing costs. Realtors representing the owner occupant buyer get to receive a $1,200 bonus on the sale. These are for HomePath properties and for buyers who intend to live in the purchased property as a primary residence. Besides these, there are also some other conditions which must be met in order to qualify for these incentives.
One of the conditions is that the buyer or the agent representing the buyer needs to request the incentive upon submission of the initial offer.
The initial offer needs to be submitted on or before June 14, 2011 and any offers made before that do not qualify for the incentives.
Also, the deadline for the incentives is October 31, 2011 and it is absolutely mandatory that the sale close before that date as there would be no extensions to that deadline.
Sales made by pool or auction will not be eligible for the June 14, 2011 to October 31, 2011 incentives.
Any property that was acquired by Fannie Mae in connection to a financing under a reverse mortgage is not eligible for this incentive.
In order to qualify, a buyer has to sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum.
These are the main conditions although there are a few more which are available on the website, homepath.com.
It is important to note that Fannie Mae also has a lot of other incentives available for homebuyers which can be found on the Homepath.com website.