Real estate news has revealed that Fannie Mae wants to give home buyers who will use the property as their residence the first chance to look at its the real estate owned (REO) homes. The federally controlled company will also allow local government agencies involved in community development initiatives to look at the REO properties as a way to increase the number of homes with occupants particularly in those areas that have suffered the most from the waves of foreclosures. On the other hand, investors will only be allowed to buy REO properties after the home buyers and local agencies have made their choices.
According to this piece of real estate news, Fannie Mae will only accept offers from local agencies and owner-occupant buyers even if investors are able to offer higher bids for the REO properties during the first 15 days after it has listed repossessed homes with a participating broker. Investors and the other types of buyers will only be permitted to post their bids after the 15 days are over.
Real estate news has also revealed that owner occupants, who have been found to be eligible for the neighborhood stabilization initiative of the Obama administration, particularly for assistance in local financing, would benefit from incentives that are not open to investors. One example is that owner occupants would not be required to pay the customary earnest money but may only have to come up with as low as 0 to reserve the property. They will also be given 45 days to close the deal as compared to the usual 30 days.
Fortunately, there also some good real estate news for investors with regards to Fannie Mae REO properties. They will continue to benefit from the company’s Home Path financing program that offers several advantages, such as no appraisal fees and mortgage insurance. The down payment can also be as low as three percent and can be financed by loan, a grant, a gift or through the buyer’s savings. Buyers who have relatively low credit scores may also be qualified. In addition to the low down payment, the mortgage terms can be interest only, fixed rate or adjustable rate.
The impact of the above real estate news on investors is not yet certain. It is believed that Fannie Mae will not completely turn its back from investors because they have been instrumental in helping Fannie Mae reduced its increasing inventory of REO homes. Nevertheless, this is an entity that is controlled by the federal government and may have to abide by the programs of the Obama administration.