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Howard Harris Real Estate Expert

Mortgage Rates



3.5% Home Buyer Closing Cost Assistance . . Such A Deal But Not For Everyone

Apr 13

filed under: Buying A Home, Foreclosures & Short Sales, Real Estate

3.5% Fannie Mae Homebuyer AssistanceWell what is up with this. Prices are the lowest they have been in a decade in the Phoenix area, interest rates are still low, at least for the time being, and now someone says “we will give you up to 3.5% towards your closing costs”. What’s the catch you ask. Well there really isn’t one, however and this is a big HOWEVER, there are circumstances and restrictions as far as who can get this assistance and what they can purchase.

So here’s the deal. First off the property has to be a Fannie Mae owned property. Who or what the heck is a Fannie Mae owned property. Buyer education moment here, Fannie Mae is a D.C. (as in Washington D.C.) government-backed mortgage firm that has in its possession a whole lot of foreclosed properties that they need to get rid of. To help expedite the disposal of these foreclosure properties Fannie Mae said lets offer a monetary incentive to help buyers purchase these properties and subsequently this special assistance program came to be.

So now you know the circumstances, i.e. the property must be a Fannie Mae owned foreclosure property. Now lets talk about the restrictions. In order to receive the “up to 3.5% towards your closing costs” you cannot be an investor. You must be a qualified buyer that will occupy the property as your primary residence. Your offer must be submitted on or after April 11, 2011 and the sale must close on or before June 30, 2011.

The way I see it this is pretty much a ten week opportunity that began two days ago. The market is crazy as it is right now, so if you want to get the ball rolling you need to do a few things FAST. First you need to get pre-qualified with a lender, you CANNOT put in an offer without a completed prequalification form attached to that offer. Well you can, but trust me they will reject it. If you need help finding a lending source I can provide you with some referrals. Second you need a good buyers agent, that’s where I come in, to help you find these specific types properties and not just any of these properties, but the ones that fit your criteria.

What Is Homepath FinancingThe other thing you want to know, especially if you are short on down payment funds is that many Fannie Mae-owned properties are also eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers home buyers an opportunity to purchase with as little as 3 percent down. For additional information on HomePath financing you may want to read my prior blog “HomePath Financing The FHA Alternative.

Hey guys,  the clock is ticking. You can do this, but you will need a good plan to get it done. Fannie Mae said it can give no assurance on the time required to close and those initial offers that are submitted AFTER May 15, 2011 are particularly questionable for closing by the incentive deadline of June 30.

Advice for you. . you need to get going, contact me and lets talk about putting that plan into action before you miss a great opportunity.

Written by Howard Harris