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Buy Foreclosed Home for Sale under Fannie Mae Lease Option

You can buy a repo home for sale under the Fannie Mae lease purchase program while you are still building up your credit record and saving up for your payments.

Because Fannie Mae has recognized the challenges faced by prospective home buyers, it has launched its Keys to Recovery programs to help stabilize the mortgage and housing markets.

The Keys to Recovery programs comprise four initiatives, one of which is the rent-to-own program, a scheme aimed at helping homeowners stay in foreclosed homes on a lease purchase basis.

The other three initiatives are the enhanced refinancing scheme for underwater Fannie Mae borrowers, the expanded partnership with state housing finance agencies to help first-time home buyers, and the improved jumbo-conforming loan scheme.

Under the rent-to-own program, a qualified resident of a community hard hit by foreclosures will be able to stay in a foreclosed home for sale on a lease purchase agreement or rent-to-own basis.

To facilitate the program, Fannie Mae has teamed up with Self-Help, a nonprofit based in North Carolina, to implement the initiative with the help of other nonprofits and community development organizations devoted to helping lower-income families own homes.

Eligible organizations will be helped to acquire foreclosed single-family homes that they will rent out to qualified families who are committed to save up for their home loan payments and to build up their credit scores. These organizations should work with neighborhoods clobbered by foreclosures.

If you are planning to buy a foreclosed property under this Fannie Mae scheme, evaluate the requirements. At the time of origination, you must be able to show documents that you have been employed for at least 12 months in your current company. You should be able to show pay stubs and back them up with telephone verification with your employer.

At the time of assumption, you must also show proofs that you have been a good tenant in the past. You can show lease payment receipts and certifications. You must also be able to show documents showing that you can pay the closing costs and down payment. Your FICO credit score must also be at least 620.

Additionally, it is important that you talk with an HUD-certified counselor so you will be guided about updates in the requirements. The federal government has been adjusting rules to be able to help more families buy an affordable foreclosed home for sale.

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