Fannie Mae and Freddie Mac need to shrink their inventories of foreclosed homes, so the two government-controlled companies are offering some amazing deals, often with down payments as low as 3 percent plus other incentives. Many of the homes are lesser properties in less-than-desirable neighborhoods, but some are real finds in good areas -- especially for budget-minded first-time buyers. The only unfortunate side effect is that your new neighbors may be upset that you bought such a nice place for much less than the value of their homes.
To pare down their growing inventory of properties, Fannie Mae and Freddie Mac are scrambling to unload nearly 150,000 foreclosed homes. And that means 2004-esque deals – like requiring as little as 3 percent down, offering to pay a portion of the closing costs and arranging special financing and warranties for repairs and renovations.
It's another option for home owners who want to trade up -- and an easier way into the market for first-time home buyers, says Dean Baker, co-director of the Center for Economic and Policy Research who studies the housing market.
The best bargain might be the home's price. A SmartMoney analysis revealed that buyers could save $100,000 by buying a Fannie or Freddie home instead of similar fair-market properties just a few blocks away.