Fannie Mae again sweetened incentives for buyers of its repossessed homes Thursday, underscoring its motivation to clear inventory.
The government-sponsored enterprise's HomePath program, which allowed buyers to finance purchases with as little as 3% down without mortgage insurance, will now give them up to 3.5% of the final sales price to be used toward closing costs, including a home warranty (if one is available). Real estate agents who represent buyers will receive a $1,500 bonus for the sale of a home.
Fannie offered a similar special earlier this year.
The latest incentives are available only on eligible purchase offers submitted on or after Thursday and the sales must close by Dec. 31.
About 87,000 HomePath properties were bought in the first half of this year, double the number of repossessed properties sold in the same period a year earlier, Terry Edwards, Fannie Mae's executive vice president of credit portfolio management, said in a press release.
Fannie and Freddie Mac typically will not buy loans with less than 5% down, and private mortgage insurance is required for all conforming loans where the borrower has less than 20% equity. HomePath is the exception. Even appraisals, a traditional prerequisite for getting a mortgage, are optional under HomePath.
The program is available only for buyers who intend to live in the homes — not for investors.