Are you currently in the market for a new home and thinking about buying a foreclosure? According to a recent article in the Chicago Tribune, Fannie Mae and Freddie Mac “are upping the incentives to interest consumers, rather than investors, in purchasing foreclosed properties and making them their homes.” Right now, there are approximately 31,000 foreclosures for sale through Fannie Mae, and the federal lender has agreed to cover 3.5 percent of the final sale price for buyers in certain states. Luckily for Chicago residents who are thinking about buying a foreclosure, Illinois is one of the 27 states where Fannie Mae has offered this incentive.
Are you thinking about purchasing a foreclosure? Or are you at risk of foreclosure in your current Illinois home? The experienced real estate attorneys and foreclosure defense lawyers at the Emerson Law Firm have been handling foreclosure matters in Illinois for years. We can answer your questions about Chicago foreclosures today.
Details of the Fannie Mae Incentive
The 27 states that are eligible for the incentive are those with the highest number of foreclosed homes, owned by Fannie Mae, that are currently in a state of limbo. In fact, “75 percent of the foreclosed homes” that Fannie Mae has repossessed are in the states qualified for the incentive.
But the incentive isn’t available to all foreclosures. The properties must be part of Fannie Mae’s First Look program. In this program, homes are placed in a “20-day period” in which they’re “only marketed to owner-occupants before they can be bid on by investors.” In other words, the incentive offer isn’t available to investors—it’s intended to help potential homeowners to buy a foreclosure that they’re planning to reside in. Recently, there were 130 homes in the Chicago area that were part of the First Look program, and these properties included an “assortment of condominiums and single-family houses,” according to the Chicago Tribune.
And potential buyers also might be able to get additional financing for renovations if they’re not satisfied with the current state of the property. Yet commentators emphasize that these homes for which the incentive applies “aren’t all the horror stories of standing water in the basement, torn-out pipes and missing furnaces.” While some of the properties “may have dated interiors,” most of them are move-in ready for all intents and purposes. Indeed, the properties currently available through the First Look program “range from a $464,900 two-bedroom condo near Water Place to a gutted, boarded-up four-bedroom, $3,150 home in the Englewood neighborhood.”
What do potential buyers have to do to get the incentive? If you’re thinking about purchasing one of the foreclosures listed in the First Look program, you will need to make an initial offer on the property by March 31, 2014, and you’ll need to close on the house by May 31, 2014.
There’s a Freddie Mac Incentive, Too
Fannie Mae isn’t the only one offering an incentive for buying a foreclosure. Freddie Mac has also offered potential buyers in 23 states, of which Illinois is one, $500 to use for “condominium association dues, flood insurance premiums, or a home warranty.” There are even more properties that are eligible for this incentive, as Freddie Mac owns approximately 12,000 foreclosures nationwide. In Illinois alone, there are about 1,000 properties that will qualify buyers for the $500 incentive.
If you have questions about how these incentives work, or if you need advice about Illinois foreclosures, contact an experienced Chicago real estate lawyer at the Emerson Law Firm today.
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