Mortgage loan lender offers closing cost, warranty program

07.21.09
By Timothy Jones

Americans looking to get an affordable home loan may be able to take advantage of a program which will not only pay for a portion of their closing costs, but give them a two-year warranty on the house.

As part of its HomeSteps program, Freddie Mac is offering the warranty - called Home Protect - along with 3.5 percent of the sales price in closing costs for homebuyers who qualify for the program and plan to use the property as their primary residence.

The program, which began last week and runs through October 30 of this year, focuses on HomeStep homes - properties owned by the real estate unit of Freddie Mac.

Freddie Mac says the Home Protect warranty will cover major appliances such as hot water heaters and washers and dryers to services in the home like electrical and plumbing. To qualify to have the first two years of the warranty paid for by Freddie Mac, homes must be purchased for more than $25,000, must be a single-family HomeSteps property and must be in the contiguous 48 states or Washington D.C.

Ingrid Beckles, senior vice president of default asset management at Freddie Mac, said the program will not only help many Americans looking for affordable housing, but may have a greater impact on the neighborhoods these homes currently occupy and the overall economy.

"We expect SmartBuy's comprehensive two-year warranty and closing cost offer to help more families buy and own HomeSteps homes, which in turn will help support home values and stabilize communities," she said. "Today's announcement shows another way Freddie Mac is addressing impacted markets to achieve the goals of the Obama administration's economic recovery effort."

With recent figures from RealtyTrac showing that the total number of foreclosures in the first half of the year increased 15 percent over the same period in 2008, it appears that American homeowners need all the help they can get.

More Housing Market Articles | News Home | Discuss in our Forum

Buying a home may be easier for some