Fannie Mae and Freddie Mac are offering financing incentives for buyers of foreclosed homes owned by Fannie and Freddie.  Home buyers have until Oct. 30 to apply for Freddie Mac’s SmartBuy program, which started in July, and offers up to 3.5 percent of a home’s sale price to help cover closing costs.  

To qualify, the home must be a principal residence and must be selected from Freddie Mac’s HomeSteps Web site (www.homesteps.com/homeshoppers.htm) for its foreclosed properties. Loans must close by year’s end.  The HomeSteps properties also include two-year warranties on major appliances and electrical, plumbing, and air-conditioning and heating systems.

Fannie Mae’s HomePath program (www.homepath.com) is an ongoing program and offers more incentives than Freddie Mac’s.  Through participating lenders, Fannie will offer mortgages to buyers who make a down payment of 3 percent.  The buyers do not have to secure private mortgage insurance, a common practice with nearly all lenders.  Home buyers also can negotiate for Fannie Mae to offer closing-cost assistance.  Unlike Freddie Mac’s program, Fannie’s assistance level is not capped.  Under the HomePath program, the average participating homeowner has received payments equivalent to 3.75 percent of the loan’s value.