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New 3.5% Seller Credit For Some Solano Buyers…But You Have To Close By April 30

January 29th, 2010 categories: Benicia, Buying, Fairfield-Gr Valley, Foreclosures / Short Sales, Loans / Financing, Solano, Suisun City, Vacaville, Vallejo

If you’re planning to buy a home in Benicia, Vallejo or any other Solano or Contra Costa County city we serve, you might want to focusClock-Money on a Scale your eyes on Fannie Mae-owned homes for the next month or two.

For yesterday, Fannie announced a new incentive program which will provide up to a 3.5% credit to cover closing costs or a combination of credits & new appliances for qualified buyers who purchase a Fannie Mae-owned home between now and the end of April.

The details:

  • The offer must be accepted on or after Jan. 28, 2010
  • Escrow must close by April 30, 2010.
  • Buyers must be owner-occupants (no investors)
  • Qualified buyers get an incentive worth up to 3.5% of the cost of the home
  • The incentive can be used to cover closings costs, new Whirlpool appliances or a combination of the two

So, on a $250,000 home, for example, if you qualify for the full 3.5% credit, you could apply the entire $8,750 towards closing costs or intstead use $5,000 towards closing costs and the remaining $3,750 towards a new refrigerator, washer, dryer, microwave & stove.

Notice, though, that I said the credit was “up to” 3.5%. In order to get that full amount, you have to make sure you’re using a loan program that allows a credit that high.

If you’re using an FHA loan, the current guidelines allow a maxiumum 6% seller credit (but that, too is changing soon). On some conventional loans, however, the max is 3%, which means that you’d could be forced to walk away from that last half-percent.

The new Fannie Mae incentive program is only good on homes that Fannie Mae has taken back as foreclosures. Currently, there are almost 50,000 Fannie Mae-owned homes nationwide.

I just searched Fannie’s local inventory and there are currently 67 Fannie Mae owned homes on the market or coming soon in Solano County, including 6 in Benicia, 22 in Vallejo, 11 in Fairfield, 5 in Suisun City, and 17 in Vacaville — in various price ranges.

And this 3.5% credit can be used in addition to the $8,000 first-time buyer federal tax credit or $6,500 move-up buyer tax credit (both of which also expire at the end of April).

If you’re in the market to buy and want to take advantage of this new Fannie Mae incentive, time is certainly of the essence, since you must be CLOSED by the end of April.

So realistically, if you anticipate 45 days to close escrow from the date your offer is accepted, that means you probably need to be in contract by mid-March.

It’s often possible to close escrow in 30 days if all your ducks are in a row when you write your offer (and if things beyond your control go smoothly during the escrow).

But if, by chance, you get into contract on Mar. 25 and somehow don’t end up closing until May 3, that 3.5% credit is out the window.

If you’d like to see how this program might help you get into a home in the coming months, please contact us and we’ll be happy to get the ball rolling for you.

You can get a quick preview of Fannie Mae’s current inventory on their HomePath web site. Keep in mind that their information may not be as current as what’s in our MLS system, so some homes that appear to be available on HomePath may really already be under contract.

If  you’ve signed up to search for homes on our web site, you can also perform your own cross-check to see the current MLS status for the same property. Or, better yet, if you’re a client or prospective client, just give us a call or send us an email and we’ll be happy to do all that legwork for you.

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This entry was posted on Friday, January 29th, 2010 at 6:05 pm and is filed under Benicia, Buying, Fairfield-Gr Valley, Foreclosures / Short Sales, Loans / Financing, Solano, Suisun City, Vacaville, Vallejo. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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