Closing Costs too Much? Fannie Mae Will Pay Some of It!

With all of the foreclosures on the books at Fannie Mae, one of the government’s largest securers of mortgage loans, executives decided that something had to be done to reduce that number. That is why Fannie Mae recently announced that it would help home buyers with the closing costs of they purchase a home.

That is really good news when you consider that Fannie Mae's inventory of foreclosed homes is also eligible for special financing programs for those who are trying to purchase a home for the first time. In addition to that, home buyers can often purchase homes backed by Fannie Mae for as little as 3 percent down. This is an extra incentive that is offered by Fannie Mae to help low income home buyers purchase their first home. As far as the closing costs, Fannie Mae is also offering to pay up to 3.5 percent of those fees if you qualify for the assistance.

In order to take advantage of this newest deal offered by Fannie Mae, you must submit an offer to purchase the home after April 11 and you must close on the home no later than June 30 of this year. You must also use the home as your primary residence rather than a vacation home or rental property in order to qualify for this deal. Investors will not be allowed to take advantage of this offer.

Terry Edwards, a portfolio manager for Fannie Mae’s department of foreclosed homes, said this incentive along with the recently low interest rates should be a good combination to encourage buyers.

Fannie Mae tried a similar program in 2010. During that year, Fannie Mae reclaimed more than 260,000 homes due to non-payment of mortgages. That's more than a quarter of a million homes and that’s just from one lender! Last year, Fannie Mae also gave $1,500 bonuses to brokers and realtors who found buyers who would purchase a foreclosed home that the lender had on its books.

If you are a first time home buyer, going through Fannie Mae while the lender is providing this offer may be one of the best options to consider. With a low down payment, low prices of foreclosures, low mortgage rates and Fannie Mae taking care of some of the closing costs, you won’t easily find a better deal right now.