A program in which Freddie Mac pays some or all of the closing costs on purchases of homes in the company’s real estate-owned (REO) inventory is ending this month, but Freddie will continue to provide two years of home warranty coverage on homes it sells.
Freddie Mac’s SmartBuy program pays closing costs of up to 3.5 percent of a home’s purchase price. On a $150,000 home, for example, SmartBuy will pay up to $5,250 of closing costs.
Buyers must submit offers on a home in the company’s REO inventory by Oct. 30 and close by Dec. 31 to be eligible. The offer is good for homebuyers purchasing a primary residence only — not as an investment property or second home.
Freddie Mac said it will continue to pay for two years of home warranty coverage with purchases of homes from its REO inventory, which buyers have the option of continuing on their own.
The Home Protect warranty, provided by Cross Country Home Services, covers electrical, plumbing, air conditioning and heating systems, as well as ductwork and many major appliances such as water heaters, stoves, washer and dryers, dishwashers and refrigerators.
In its last quarterly report to investors, Freddie Mac said it was in possession of 34,699 homes at the end of June, up 19 percent from the previous quarter and 57 percent from the same time a year ago.
The homes were either foreclosed on or deeded back to Freddie Mac in lieu of foreclosure. Buyers can search for homes for sale from Freddie Mac’s REO inventory at HomeSteps.com.
Fannie Mae said its REO inventory totaled 62,615 at the end of June, unchanged from the previous quarter but up 16 percent from a year ago. Fannie Mae lists those homes it has put up for sale at Homepath.com.
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