Got a buyer looking at Home Path properties from Fannie Mae? Right now is the time to act as the second quarter incentive can add an extra 3.5% of benefits for your buyers. Here are the main points you need to know:
Owner occupant homebuyers are eligible for an incentive of up to 3.5% of the final sales price to be used for closing cost assistance when purchasing a HomePath property. Buyers must request the closing cost assistance incentive when submitting their initial offer on or after April 11, 2011 and they must close by June 30, 2011.
Frequently Asked Questions:
Q: If a property is scheduled to close before June 30, 2011 but is delayed, will the buyer still receive the incentive?
A: No. The incentive will only be applied to sales that close on or before June 30, 2011. Listing Brokers must ensure that all proper documentation and paperwork are filed prior to June 30. Initial offers submitted after May 15 may be difficult to close by the incentive deadline of June 30, 2011.
Q. Are multifamily homes (2 to 4 units) eligible for an incentive?
A. Yes, as long as the homebuyer is an owner occupant who intends to occupy one of the units as their primary residence and meets the incentive eligibility criteria.
Q. The incentive guidelines on HomePath.com indicate that the buyer/selling agent must request the incentive at the time of initial offer. Do buyer/selling agents have to complete a form or submit a request letter?
A. Yes, the Listing Agent must note the incentive request in Section 38 of the Fannie Mae Purchase Addendum (see below) when the initial offer is submitted.
Q: Should Brokers document the closing cost assistance at offer?
A: Yes. Listing Brokers should ensure that Selling Agents (agent representing the buyer) document the buyer’s closing cost assistance percentage in Section 38 of the Fannie Mae Purchase Addendum at the time of initial offer submission and document the language on the addendum as follows:
“Seller will pay an amount not to exceed $______ toward buyer’s closing costs provided closing occurs by the settlement date in 2(b) or a mutually agreed upon amended date, but not later than June 30, 2011.”
Q: Are offers submitted or accepted before April 11th eligible for the incentive?
A: No. Only initial offers that are submitted on or after April 11 are eligible for the closing cost incentive.
Q. The buyers are a mother and son and only the son is going to occupy. Does the buyer qualify for the incentive?
A. Yes. The buyer who will occupy the home must sign the Owner Occupant Certification form and include it in his/her initial offer package submission. All Buyers must be on the contract, mortgage, and deed.
Q. The buyer is a licensed real estate agent and is going to occupy as a primary residence. Is the buyer eligible for the incentive and the selling agent bonus (where available)?
A. Yes.
Q. Are second homes (defined as a vacation home or a home used only part of the time) eligible for the incentive?
A. No. The purchaser must be an owner occupant who will use the property as their primary residence. All buyers must sign and include the Owner Occupant Certification form with their initial offer package prior to submission.
Q: Do properties have to be HomePath Mortgage or Renovation financing eligible in order to qualify under this offer?
A: No.
Q: Is this incentive available only to buyers who use HomePath financing?
A: No. The incentive is available to all eligible buyers, regardless of whether they pay cash or choose to finance. However, if the buyer is financing the purchase, the lender may impose restrictions on the use of the incentive. The buyer should consult his or her lender.
Q: Are non-profits or city purchasers who intend to rehab the property and sell it to an owner occupant eligible for the incentive?
A. Yes. The public entity should be entered as an investor buyer type.
Q: Are there limitations to the incentive when using the Neighborhood Stabilization Program (NSP)?
A: Possibly. Public Entities are treated as owner occupants and therefore the incentive may be offered to eligible owner occupants and public entities (PE) and/or their designated partners. If a buyer is using financing, the lender may impose restrictions on the use of the incentive so the buyer should consult his or her lender.
Q. Can a buyer use the 3.5% in closing costs toward repairs?
A. Yes. Up to 3.5% (subject to lender limitations) can be applied toward closing costs, points, prepaids, home warranties, surveys, appliances, or repair credits as determined to be acceptable by the buyer’s lender. The incentive may be reduced to accommodate a buyer request for repairs to be performed by the seller prior to closing.
Q. Does the incentive apply to every property on HomePath.com or only those properties that are eligible for HomePath financing?
A. The incentive is available on every home on HomePath.com except homes offered via auction or pool sale or in instances where the insurer will not permit the incentive.
