Fannie Mae has once again upped the ante to encourage home buyers to purchase, and real estate agents to market its real estated owned (REO) properties. It is estimated that Fannie Mae and Freddie Mac, the two government sponsored enterprises (Enterprises) currently in conservatorship, own a combined 191,000 properties taken through foreclosure.

Fannie Mae markets its REO through a program called HomePath Properties. Under the new incentive program, owner-occupants and public entities that buy a HomePath Property between now and the end of the year can receive up to 3.5 percent of the purchase price in closing cost assistance. The funds can also be used to purchase a home warranty. Properties bought from pools, at auction, or by investors are not eligible. The sale must close within 60 days of acceptance of the offer and no later than December 31, 2010. The incentive must be requested in the initial offer.

Buyers are advised to check with their lenders. Some funding now allow a seller to provide a maximum of 3 percent of the purchase price as an incentive and in such cases, the extra 0.5 percent cannot be redeemed by the buyer in any other form.

HomePath properties are generally marketed through real estate agents and any selling agent representing a buyer occupant who purchases a property that closes by December 31 will receive, in addition to the agreed commission, a $1,500 bonus. The agent must request the bonus when submitting the initial offer.

Some HomePath Properties are also eligible for HomePath mortgage financing or a HomePath renovation mortgage. These loans have down payments as low as 3 percent which can be funded by a gift, do not require mortgage insurance, and carry flexible mortgage terms including lower credit requirements. These loans are also available to investors.

"More than eighty-seven thousand families have purchased HomePath(R) properties in the first half of 2010-nearly double the number of Fannie Mae foreclosed properties sold in the first half of 2009," said Terry Edwards, Executive Vice President of Fannie Mae's Credit Portfolio Management. "We continue to look for ways to stabilize neighborhoods and offer incentives to qualified buyers who will occupy these properties over the long-term and help support their communities."

Source: Mortgage News Daily