Freddie Mac HomeSteps Review

March 4, 2013 6 Comments »
Freddie Mac HomeSteps Review

In case you weren’t aware, Freddie Mac, along with sister Fannie Mae, acquired a ton of real estate as a result of the ongoing mortgage crisis.

And one way Freddie Mac is reducing their inventory of REO is via their “HomeSteps” program, which is the company’s real estate sales unit.

Sure, they don’t want to be in the business of selling real estate, but because they’re a quasi-government agency, they have to do it efficiently and ethically.

HomeSteps Good Neighbor Practices

Freddie Mac implemented its so-called “HomeSteps Good Neighbor Practices,” which adhere to the following procedures once HomeSteps acquires a home:

– Home is secured
– Trash is removed from both interior and exterior
– Lawn is properly maintained on an ongoing basis
– Interior and exterior are cleaned

So basically Freddie Mac ensures the REO properties they sell aren’t covered in graffiti, filled with trash, and surrounded by weeds, like some foreclosed properties very well could be.

In other words, buyers of HomeSteps properties get a little added piece of mind in the sometimes scary world of buying previously foreclosed homes.

Along with the upkeep of properties, Freddie Mac offers HomeSteps buyers a $500 credit toward the purchase of a home warranty of their choice.

And those who wish to occupy the homes get the first shot at making an offer (exclusive 15-day window when property is first listed on MLS).

For the record, investors can also buy HomeSteps properties via online auctions and bulk sales.

HomeSteps Buy-A-Home Initiative

If you intend to occupy a HomeSteps property as your primary residence, you can get your hands on a 3% “Closing Cost Coupon” if you complete some basic Homeowner Education classes.

This offer is available even if you owned property in the past, and the classes are free of charge.

The required classes, which are offered by HUD-approved housing agencies, include a credit/financial education course and a home buying process class.

Once completed, you get 3% in closing cost assistance, which is certainly worth the time it takes to complete the courses.

[Tips for first-time hombuyers.]

Additionally, those who intend to occupy the homes as either a primary residence or second home now get 20 days under the “HomeSteps First Look Initiative” to submit offers on new listings before investors can take part.

This makes it easier to land a property without worrying about someone coming in with all cash and snagging your dream home.

HomeSteps Financing Options

Back in the third quarter of 2012, Freddie Mac launched a financing program tied to HomeSteps known as “HomeSteps Financing.”

It offers the following incentives to homebuyers:

– No appraisal requirement
– No mortgage insurance costs
– Down payment as low as 5%

As you can see, HomeSteps makes the home buying process a little bit easier, with no need for an appraisal (purchase price used for valuation) and no mortgage insurance necessary.

That will save homebuyers some cash and make the closing process a little less arduous.

The perks enjoyed via HomeSteps are similar to what Fannie Mae offers in its HomePath program, though Fannie allows down payments as low as 3%.

Note: Closing must occur within a 45-day escrow to be eligible for HomeSteps Financing.

Where Is HomeSteps Financing Offered?

At the moment, HomeSteps Financing is only available in four states, including Florida, Georgia, Illinois, and Texas.

And only two lenders are currently participating in the program, including Nationstar and Regions Bank.

But according to a 2012 10-K filed by the company, the success of the program should lead to a national rollout this year. And hopefully that will be accompanied by some special buyer incentives, so stay tuned!

If you want to keep an eye on inventory, you can join the HomeSteps HomeBase Network for free to get new listings e-mailed to you on a weekly basis or immediately when they become available.

This is yet another avenue to “see what’s out there,” seeing that lack of inventory continues to be an issue for hungry homebuyers.

Just keep in mind that not all homes listed on homesteps.com are eligible for HomeSteps Financing, so contact the assigned listing broker before making an offer.

HomeSteps 2014 Winter Sales Promotion

Thanks to all that cold weather, Freddie Mac is currently offering cash incentives to real estate agents that list or sell HomeSteps properties in 23 states nationwide between February 18 and April 15, 2014.

Per Freddie Mac, selling agents will receive a $1,000 incentive and listing agents will earn $500.  Additionally, home buyers will get $500 that can be used towards HOA dues, flood insurance premiums, or a home warranty.

The only rules, other than location, are that it must be a primary or secondary residence, and that it must close on or before May 30, 2014.

The promotion is available in Alabama, Connecticut, Colorado, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Missouri, North Carolina, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, Washington, and Wisconsin.

Read more: How to qualify for a mortgage.

6 Comments

  1. Holly August 18, 2015 at 11:22 pm -

    The house next-door to me is a REAL owned by Freddie Mac. They bought it at auction and were the only better at 93,000. For many months contractors have been working on the house. I was not aware until seeing this the banks were in the rehab market. I have found the house listed for sale at 134,000 on a REO website. There is a lock box on the home, no real estate sign in the yard. I have called the toll-free number for Freddie Mac, only to find a recording directing me to their website. Searching the Freddie Mac website in Florida does not bring up the listing. Numerous realtors have not been able to locate the listing, it does not appear to be in the MLS. I would like to buy the home.

    1. Can I purchase the home has a second home for myself?
    2. How can I contact Freddie Mac other than the toll-free number on their website which leads to a recording?

    I would like to make a full price offer before it hits the market . Is there anyway to this?

    Thank you kindly for any assistance you can provide.

  2. Stefan November 17, 2015 at 11:22 am -

    OK, unless you need specific answers, i can give you this quick response. You cannot buy the property through the first look program [why there is no real estate sign] as a second home. Non owners looking for occupancy get first dibs. Second, i have found 9 times out of ten, Freddie Mac and Fannie Mae call back with a day or so to detailed messages left on their computer systems.
    So, when it hits the market, have all your ducks in a row. Get your proof of finance and offer paperwork spine in advance and have a lawyer or closing company lined up, be fast, offer the most you will pay right away, because low balking leaves the next guy higher than you. I hope this advice will help you.
    Stefan

  3. Gary S December 15, 2015 at 9:45 pm -

    The HomeSteps property next door is a blight on our rural desert community! For four years now we have been chasing off squatters, thieves and meth addicts.
    The place is a rat infested dump!
    A recent ‘incentive program’ attracted a buyer who removed all of the native vegetation on this worthless property-including trees and shrubs on my property next door!
    Get this! He did this while the property was in still in escrow!

    The Home Steps listing agent doesn’t give a rip!
    The ‘buyer’ doesn’t give a rip!

  4. Colin Robertson December 16, 2015 at 11:28 am -

    Gary,

    Wow, that sounds terrible.

  5. Rhonda Robison February 20, 2016 at 3:23 pm -

    Why won’t you lower our interest rate of 6.625 percent so we can keep our home. Wells Fargo is just as bad. They say they want to keep people in their home which is not true

  6. Noree March 18, 2016 at 10:37 am -

    I emailed my offer on a property in NJ on March 7th. I received an email from DoNotReply@freddiemac.com on March 8th stating that my offer was received. Someone called to verify that my buyer was going to be an owner occupant. She said I would hear back from them.
    10 days later and no responses to the many messages I left for the listing agent, I found that the house was listed as Under Contract in multiple listing on March 8th. How can this agent represent FreddieMac and not answer calls? Not a word! Not a NO! Not a counter-offer! Nothing! Can someone tell me why this happened? Doesn’t FreddieMac want to get the highest price for these homes? If there are multiple offers, isn’t there a final and best route? My buyer is upset and I am angry that I was treated so unprofessionally by the listing agent.

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