Freddie Mac’s Closing Cost Assistance Expires at End of Month

Homebuyers have less than a month left to take advantage of a program that pays a significant part of a buyer’s closing costs according to a press release issued by Freddie Mac this past week.

The HomeSteps-SmartBuy program, created on July 17, 2009, was designed by Freddie Mac to help homebuyers with their closing cost expenses. Under the program, the mortgage giant offers to pay up to 3.5 percent or actual closing costs, whichever is lower for owner-occupied, financed homes and up to 1 percent for owner occupied cash sale homes. Investors are not eligible for this program.

HomeSteps is the real estate sales unit of Freddie Mac and markets a nationwide selection of Freddie Mac-owned homes. The program also includes a comprehensive two-year home warranty on HomeSteps homes. Although the closing cost offer expires October 30, the warranty will be ongoing.

The HomeSteps program has been viewed by some industry observers as an effective partnership between Freddie Mac and local real estate agents who market the homes. The program is essentially for people who are okay and comfortable with purchasing a repossessed home. The good news is that these homes are usually in move-in condition. HomeSteps has about 20,000 properties across the nation, with about 40 percent of this total in California.

The HomeSteps-Smart Buy program is a win/win for both Freddie Mac and assisted home buyers. The program helps homebuyers purchase homes with some financial assistance; and at the same time it helps Freddie Mac sell off some of its repossessed properties.

However, the program has not been a total success and the large mortgage fund provider is looking for more deals before the financial assistance expires.