Fannie Mae Gives Another Month For Incentive Program

Posted by Patrick Barnard on March 28, 2014 No Comments
Categories : Mortgage Servicing

Fannie Mae is now extending its 3.5% closing cost assistance incentive for HomePath properties purchased during the FirstLook period in 27 eligible states.

During the FirstLook period, owner-occupant or public entity buyers are able to submit offers on HomePath properties, giving them the opportunity to purchase a home without competition from investors, says Fannie Mae. The FirstLook period is in effect for the first 20 days a property is on the market.

To be eligible for the incentive, the initial offer must be submitted by April 30 and close on or before June 30. The incentive will offer qualified buyers up to 3.5% of the final sales price to pay closing costs.

Jay Ryan, vice president of real estate owned (REO) sales, says the extension stems from their receiving a "strong response" from the incentive program since its Feb. 14 start and from the harsh – and extended – weather conditions of this winter.

Originally, the initial offer must have been submitted before March 31 and closed on or before May 31.

In many cases, Fannie Mae says buyers could use these savings to buy down their interest rate through upfront points, resulting in additional savings over time. Buyers can work with the lender of their choice to determine if this is an option.

Both Fannie Mae and Freddie Mac have introduced incentives to bolster home sales through their HomePath and HomeSteps programs, respectively, which are designed to help the firms liquidate the REO properties they hold in their portfolios.

Freddie Mac has not yet announced if it will also be extending its HomeSteps incentive.

The complete list of the 27 eligible states can be found here.

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