Freddie Mac Offers Homeowners Warranties on Foreclosure Properties – And Pay For Closing Costs!

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Freddie Mac’s foreclosure (REO) sales division called HomeSteps, the sales division of Freddie Mac owned properties nationwide announced on Monday that they will be offering potential home owners a few incentives in an effort to stimulate the market and encourage consumers to take advantage of the current real estate market – for example: a home warranty.

The new incentives are part of a promotion offered through Freddie Mac which began July 17, 2009 and will run through October 30, 2009.

Freddie Mac is now offering an opportunity for its home buyers. When purchasing a property Freddie Mac will pay up to 3.5% of the sales price in closing cost assistance. In addition to this incentive they are also offering a comprehensive 2 year warranty paid for by Freddie Mac.

The current state of foreclosure properties vary from excellent condition to absolutely deplorable. When a homeowner is facing foreclosure and is given notice to vacate the property often times properties are not taken care of and pre existing problems can turn into bigger more complicated issues such as roof damage due to the negligence of the previous home buyer.

The warranty offered will protect the homeowner from unforeseen problems such as the roof which can costs upwards of $10,000.00 depending on the property. The warranty will cover many other things as well such as electrical, plumbing, A/C and heating systems. After the first two years of the warranty have expired the homeowner will have the option of continuing the warranty and pay for it on their own.

There are some restrictions to this home warranty. The warranty is available on single-family residences only and the property must be sold through the HomeSteps Program. In addition the property must be sold as the owners’ primary residence and must be at least $25,000.00 in purchase price. Also, it is only available in the continuous 48 United States as well as Washington, D.C.

To qualify for these incentives initial offers on properties must be submitted no later than October 31, 2009 and property closing must be completed by December 31,2009.

With 3.5% closing costs paid for by Freddie Mac as well as a full 2 year warranty, Freddie hopes to spark up the housing market and increase sales as well as stabilize values and communities.

The warranty is NOT available to those purchasing property outside of the HomeSteps Program and those properties sold as an investment property or second home.

For more information effecting foreclosures and new incentives that homeowners can take advantage of, refer back to our blog weekly for updates.