Two Names Two functions...
Freddie Mac... And Fannie Mae.
Freddie Mac and Fannie Mae are private mortgage companies that purchase mortgages from lenders. They are the two major secondary mortgage companies in the United States.
What does that mean? It means they have access to a lot of lenders and thousands of foreclosure sales.
How Does Fannie Sell Homes? The Basics.
You can find out about Fannie Mae-owned homes through local real estate brokers. All Fannie Mae-owned homes are listed in the local Multiple Listing System (MLS).
First... Get Pre-Qualified.
Fannie Mae requires prospective buyers to be pre-qualified for a mortgage loan. That's good for you because you'll know how much you can afford, and it assures Fannie you will be able to complete the transaction.
Second... Talk Turkey.
First, you present your offer to the listing broker who will present it to Fannie Mae for consideration. Through the listing broker, Fannie Mae will do one of three things in response to your offer: accept your offer; reject your offer; or make a "counter offer."
Note: Fannie Mae will NOT accept offers that are contingent on the sale of the buyer's current home.
Last... The Bottom Line.
A counter offer indicates the start of negotiations that may or may not result in a sale. If a sales price is agreed upon, you will sign a "purchase and sales agreement" and begin the process of obtaining mortgage financing to purchase the home.
Fixing It Up... Does Fannie Do Repairs?
Sometimes! Fannie will sometimes repair a home prior to listing or as part of the purchase agreement. But Fannie Mae sells each property in an "as is" condition. When you take ownership of the property you accept it that way.
That means getting your own professional home inspection, prior to closing, to reveal any problem that might force you to reconsider!
What About Freddie... How Does Freddie Sell Homes?
Freddie Mac homes are available through local real estate brokers, too. One key difference from Fannie is that Freddie repairs many of the homes it sells, at an average of $5,000 per home. You can choose to repair the home yourself, but Freddie advertises its homes in "move-in" condition.
You still need your own home inspection to make sure you know what you're getting!
Getting Funds... Freddie Does Financing
Freddie says it offers financing through local lenders, at "competitive interest rates," under the following terms: no mortgage insurance lower title and escrow fees only 5 percent down on all available homes
That's the Story on Our Friends Freddie and Fannie...
Now let's look at HUD homes.
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