For homebuyers, there are a lot of good deals on foreclosed properties right now, especially with mortgage rates being as low as they are. And Freddie Mac has just sweetened the deal.
From now through the end of October, the government-backed lender is offering to cover closing costs on any single-family inventory, up to a limit of 3.5 percent of the selling price. In addition, the company is also offering a two-year home warranty covering major systems and appliances at no extra charge.
In addition, buyers can also get up to 30 percent discounts on the purchase of new name-brand appliances as well.
Warranty guards against repair costs
The promotional program applies to real estate owned homes sold through the agency's HomeSteps unit, which deals in foreclosed properties that have been turned over to the lender. Called SmartBuy, the program seeks to address one of the major concerns homebuyers have about buying foreclosed property, namely, the potential cost of repairs on a home that may have been poorly maintained or allowed to deteriorate.
According to information provided by Freddie Mac to California real estate agents, HomeSteps already does repairs on about 40 percent of the homes it takes possession of, at an average cost of about $6,000 apiece. The two-year warranty Freddie Mac is offering under the SmartBuy promotion covers such things electrical, plumbing, air conditioning and heating systems, as well as major appliances such as water heaters, stoves, washer and dryers, dishwashers and refrigerators.
Assistance with closing costs
In addition, Freddie Mac will pay closing costs of up to 3.5 percent of the purchase price. For example, on a $200,000 home, the program would pay up to $7,000 in closing costs, not to include the down payment.
To qualify, buyers must complete a SmartBuy Buyer's Closing Cost registration form, available on the HomeSteps web site, and obtain a coupon that must be presented both at the time of the original offer and at closing. Purchase offers must be made by Oct. 30, 2009, with closing taking place by Dec. 31, 2009.
To qualify, a property must be purchased for use as the primary residence of the buyer. Eligible properties include single-family homes in freestanding houses, condominiums, coops or townhouses. Multiunit buildings of up to four units are also eligible as long as one unit is to serve as the primary residence of the buyer.
Rental, vacation properties not eligible
Second and vacation homes, investment properties or property purchased solely for rental purposes are not eligible. There is a minimum purchase price of $25,000.
The home warranty offer is valid only within the 48 contiguous states and Washington, D.C. The closing cost assistance offer is available in all states and in the U.S. territories of Puerto Rico, Guam and the Virgin Islands.
More information on the program, including localized listings of eligible HomeSteps properties, are available through the HomeSteps web site. Local real estate agents can also provide information on which properties are offered through the program.
A similar program is not currently offered by Fannie Mae, the other major government-backed lender, but it does offer certain incentives through its HomePath unit, which handles Fannie Mae-owned properties.