Home mortgage interest rates have never been lower, foreclosed properties are available for bargain prices, special grant programs even pay down payments and on-line tools let you shop for foreclosed homes across the country.
A Wall Street Journal Article on July 11 reported that local conditions vary widely and national indicators may not give a good picture of what’s happening in any area. The East Coast, South and upper Midwest still have bargains, while the West is shifting to a sellers’ market.
Both Fannie Mae and Freddie Mac have specialized web sites devoted to home buyers looking for their foreclosed properties.
Most web sites, government and private, will let you search and browse a great deal of information for free. They are set up to show available homes by zip code, which allows buyers to target very specific areas in searches tightly focused on features and price ranges.
Foreclosed homes are commonly listed through licensed Realtors. Most have been through the auction process before being offered for sale as foreclosed properties. Buyers should check how long they have been on the market, keeping in mind that the longer lenders own the property, then the more eager they are to sell.
The Fannie Mae site is called HomePath®. It offers a flexible search engine and a special mortgage program with low down payments and flexible terms. Down payments of as little as 3 percent of the purchase price can come from a grant or loan from a non-profit corporation, and state or local government programs. With the HomePath program, a buyer does not need mortgage insurance.
The Freddie Mac site gives similar leads and help on finding foreclosed homes.
Both of the federal mortgage insurance agencies urge shopper to realistically assess how much they can afford and work with a housing counselor. They also encourage buyers to check out the many assistance programs for home buyers.
For instance, Fannie Mae sell properties “as is” but it offers a special HomePath Renovation Mortgage to cover both the purchase price and renovations. You can also use FHA 203k in the same way, as long as the home will be your primary residence.
Both agencies require potential buyers to get pre-approval for financing from lenders. This step gives potential buyers a letter showing the price range in which they can get financing that they can show to a seller.
Commercial sites broaden the searches for potential buyers, including both the government programs and homes offered by banks. Web sites like Zillow and Foreclosure.com offer broad-based search programs for foreclosed homes.
For instance, searches of the Michigan college towns of Ypsilanti and Lansing show foreclosed homes in the price range of $20,000 to $50,000. Condos in buildings only 11 years old in the Uptown neighborhood of Chicago are asking less than $200,000.
Some foreclosed homes are marked in web sites as “pre-foreclosures.” These are in the early stages of foreclosure when the owner has been given notice of foreclosure and the property is being advertised, but the owner still might take steps to keep the property.
It’s worth checking out state and local assistance programs for home buyers. The U.S. Department of Housing and Urban Development Stabilization Act provides funds for many lower income buyers.
The program works through local organizations that establish their own procedures to give grants assisting people buying homes in neighborhoods impacted by foreclosures. One-quarter of the grants to local organizations under the HUD program must go to purchase abandoned or foreclosed homes that will house individuals or families whose incomes that do not exceed 50 percent of the area median income. HUD explains these programs in a special home buyer assistance program web site.
You can learn more about the HomePath option with the free eBook "A HomePath Buyer's Guide" at the button below. This guide covers the Fannie Mae program front-to-back so you can go into the foreclosed homes market as an educated buyer.