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.]
HomeSteps Financing
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.
Read more: How to qualify for a mortgage.
