T
he Denver housing market continues to grow as a buyer's market every day. Starting last week, Fannie Mae and Freddie Mac – in a move to cut down their current inventory of over 150,000 foreclosed homes – began offering an array of extremely attractive incentives for home buyers. According to Dean Baker, co-director of the Center for Economic and Policy Research, it's another option for home owners who want to trade up – and an easier way into the market for first-time home buyers. The top features of the Fannie Mae and Freddie Mac foreclosure deals are these:
Fantastic prices: Buyers could save $100,000 by buying a Fannie or Freddie home instead of similar fair-market properties in the same neighborhood. A SmartMoney.com search of Fannie Mae and Freddie Mac listings found a variety of properties in good neighborhoods – and for $100,000 less than comparable houses nearby.
Small down payments: Fannie Mae will accept a down payment of as little as 3% on 30-year mortgages, at the same interest rates currently offered by banks. Additionally, Fannie Mae does not require private mortgage insurance (PMI). Using a typical bank mortgage, buyers are required to put 10% down, plus PMI if they're putting down less than 20%. On a $300,000 mortgage, the Fannie Mae program savings are about $51,000 up front and $2,500 each year on PMI.
Help with renovations: To encourage buyers who want to update or upgrade, many of the foreclosed properties come with an optional mortgage with extra financing of up to $30,000 for repairs and improvements. Fannie Mae and Freddie Mac have repaired major issues with their foreclosed properties, including things like leaking roofs and damaged electrical wiring. They are also frequently willing to step in for additional repairs, such as replacing damaged or missing appliances, tearing out old carpet, and other problems left behind by former owners or vandals.
First rights to purchase: Buyers who plan to live in these properties get a minimum 15-day chance to see the homes – inside and out – before investors can purchase them. Think about taking along a contractor (most will accompany you for free), to help locate necessary repairs and provide pricing.
The Bandy Team is here to make your search for a Denver home a relaxed and pleasant experience. We know Denver, and we can provide plenty of information about Denver communities. Whether you're seeking a home in Denver, a Parker horse property, or a condominium in Founders Village, we are your local real estate experts. We will help you navigate the Denver real estate market to find your perfect home!
Marianne Bandy
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