How to Buy Foreclosures from Fannie Mae and Freddie Mac
Do your research about home buying in general., Locate a foreclosed property., Contact the listing agent., Make an offer and negotiate a deal., Look for special programs for a Fannie Mae or Freddie Mac listing., Participate in the HomePath Ready...
Step-by-Step Guide
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Step 1: Do your research about home buying in general.
This article is not designed to walk through all the steps of general home buying.
There are numerous resources available online that can explain that process for you.Additionally, you can view the LifeGuide Hub article, How to Buy a House.In short, the steps for preparing to buy a home generally include:.
Research your finances Shop for the best mortgage rates available Get pre-qualified for a mortgage loan Work with a real estate agent to find a home Make an offer and negotiate the deal Close on the purchase. -
Step 2: Locate a foreclosed property.
The primary difference between buying a property from Fannie Mae/Freddie Mac as opposed to buying from another private homeowner is that Fannie Mae/Freddie Mac owns thousands of foreclosed properties across the country.Using online resources, such as HomePath.com, by Fannie Mae,or HomeSteps.com for Freddie Mac properties,you can identify an area of the country and find homes for sale.
The link will show you pictures of the house, a map to see its exact location, details about the property, and contact information for the listing agent.
You can also sign up to be on Fannie Mae’s email list to get updates on foreclosures. , If you find a property that interests you online, you can contact that agent directly and arrange to see the house.
If you are already working with your own real estate agent, then your agent can make this contact for you.
Be aware that some properties may not have the water or electricity turned on, so you may need to go during the day and you might not be able to check things like the water pressure. , Once you have identified the property, buying a Fannie Mae/Freddie Mac property is not much different than buying any other property, except that instead of an individual private seller who decides whether your offer is acceptable, it will be a representative of Fannie Mae/Freddie Mac.Keep in mind that you may not be able to get a loan on a property if it is in poor condition, and this may be the case if the home has been vacant for a long time.
Therefore, a cash sale may be your only option in some situations, or you may be able to get a home rehab loan depending on your credit score, the value of the home, your down payment amount, and whether or not you will be occupying the home.
Be honest with the lender and discuss your options. , Foreclosed properties that are offered for sale by Fannie Mae or Freddie Mac are sold through their online programs, HomePath.com and HomeSteps.com.
These listings have special programs that may help you.
Reviewing those sites regularly will keep you informed on the most current incentives. , Fannie Mae offers an educational program for first-time home buyers, to learn the process of buying a home from Fannie Mae.
Buyers who complete the program can earn a discount on the closing costs of their purchase., This program allows buyers who intend to occupy the property as their primary residence exclusive opportunities to negotiate and purchase foreclosed properties for 20-30 days before other investors have a chance.
This gives these residential buys an advantage in making offers and negotiating the best deals.If you are looking for property from Fannie Mae on the HomePath.com web site, understand that with each new listing you have 20-30 days to make your offer before non-residential investors begin making offers. , A “cut-off” time is set, and any offers that are submitted before that time are entered into a database.
When the time is reached, the best eligible offer is accepted.
It is important, therefore, to make you best offer first – don’t try to lowball and hope to negotiate., The name “Fannie Mae” sounds like a person, but it is just the acronym for the Federal National Mortgage Association (FNMA).
Fannie Mae was created by a charter established by Congress in
1938.Its purpose is to “provide stability in the secondary market for residential mortgages.”It does this by providing cash to banks and mortgage companies for the mortgages that they issue.In other words, Fannie Mae “buys” mortgages after a bank initially lends the money to a home buyer. , The name “Freddie Mac” also sounds like a person, but it is the acronym for the Federal Home Loan Mortgage Corporation (FHLMC).
Similar to Fannie Mae, Freddie Mac was created by Congress in 1970,to “provide stability in the secondary market for residential mortgages.” , Fannie Mae and Freddie Mac do NOT independently fund loans to buyers and investors.
Rather, they buy and sell mortgages to applicable lenders.
These companies exist to assure an indefinite source of funds for home loans.
As a result, a homeowner may not be aware that their loan is owned by Fannie or Freddie instead of the lender through which they obtained the loan.
These companies repossess homes with loans in their ownership when a homeowner defaults, just as any other bank or mortgage company would do. -
Step 3: Contact the listing agent.
-
Step 4: Make an offer and negotiate a deal.
-
Step 5: Look for special programs for a Fannie Mae or Freddie Mac listing.
-
Step 6: Participate in the HomePath Ready Buyer Program.
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Step 7: Take advantage of the HomePath First Look Program.
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Step 8: Understand the HomeSteps “Multiple Offer Process.” Freddie Mac properties undergo a special process when multiple offers are received from different buyers for the same property.
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Step 9: Learn about Fannie Mae.
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Step 10: Learn about Freddie Mac.
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Step 11: Understand what Fannie Mae and Freddie Mac do.
Detailed Guide
This article is not designed to walk through all the steps of general home buying.
There are numerous resources available online that can explain that process for you.Additionally, you can view the LifeGuide Hub article, How to Buy a House.In short, the steps for preparing to buy a home generally include:.
Research your finances Shop for the best mortgage rates available Get pre-qualified for a mortgage loan Work with a real estate agent to find a home Make an offer and negotiate the deal Close on the purchase.
The primary difference between buying a property from Fannie Mae/Freddie Mac as opposed to buying from another private homeowner is that Fannie Mae/Freddie Mac owns thousands of foreclosed properties across the country.Using online resources, such as HomePath.com, by Fannie Mae,or HomeSteps.com for Freddie Mac properties,you can identify an area of the country and find homes for sale.
The link will show you pictures of the house, a map to see its exact location, details about the property, and contact information for the listing agent.
You can also sign up to be on Fannie Mae’s email list to get updates on foreclosures. , If you find a property that interests you online, you can contact that agent directly and arrange to see the house.
If you are already working with your own real estate agent, then your agent can make this contact for you.
Be aware that some properties may not have the water or electricity turned on, so you may need to go during the day and you might not be able to check things like the water pressure. , Once you have identified the property, buying a Fannie Mae/Freddie Mac property is not much different than buying any other property, except that instead of an individual private seller who decides whether your offer is acceptable, it will be a representative of Fannie Mae/Freddie Mac.Keep in mind that you may not be able to get a loan on a property if it is in poor condition, and this may be the case if the home has been vacant for a long time.
Therefore, a cash sale may be your only option in some situations, or you may be able to get a home rehab loan depending on your credit score, the value of the home, your down payment amount, and whether or not you will be occupying the home.
Be honest with the lender and discuss your options. , Foreclosed properties that are offered for sale by Fannie Mae or Freddie Mac are sold through their online programs, HomePath.com and HomeSteps.com.
These listings have special programs that may help you.
Reviewing those sites regularly will keep you informed on the most current incentives. , Fannie Mae offers an educational program for first-time home buyers, to learn the process of buying a home from Fannie Mae.
Buyers who complete the program can earn a discount on the closing costs of their purchase., This program allows buyers who intend to occupy the property as their primary residence exclusive opportunities to negotiate and purchase foreclosed properties for 20-30 days before other investors have a chance.
This gives these residential buys an advantage in making offers and negotiating the best deals.If you are looking for property from Fannie Mae on the HomePath.com web site, understand that with each new listing you have 20-30 days to make your offer before non-residential investors begin making offers. , A “cut-off” time is set, and any offers that are submitted before that time are entered into a database.
When the time is reached, the best eligible offer is accepted.
It is important, therefore, to make you best offer first – don’t try to lowball and hope to negotiate., The name “Fannie Mae” sounds like a person, but it is just the acronym for the Federal National Mortgage Association (FNMA).
Fannie Mae was created by a charter established by Congress in
1938.Its purpose is to “provide stability in the secondary market for residential mortgages.”It does this by providing cash to banks and mortgage companies for the mortgages that they issue.In other words, Fannie Mae “buys” mortgages after a bank initially lends the money to a home buyer. , The name “Freddie Mac” also sounds like a person, but it is the acronym for the Federal Home Loan Mortgage Corporation (FHLMC).
Similar to Fannie Mae, Freddie Mac was created by Congress in 1970,to “provide stability in the secondary market for residential mortgages.” , Fannie Mae and Freddie Mac do NOT independently fund loans to buyers and investors.
Rather, they buy and sell mortgages to applicable lenders.
These companies exist to assure an indefinite source of funds for home loans.
As a result, a homeowner may not be aware that their loan is owned by Fannie or Freddie instead of the lender through which they obtained the loan.
These companies repossess homes with loans in their ownership when a homeowner defaults, just as any other bank or mortgage company would do.
About the Author
Jean Lane
Specializes in breaking down complex hobbies topics into simple steps.
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