For Sale By Owner

Securing a Home loan for buying a housing property is the most common feature prevalent in any country. Home buying, for whatever purpose, whether for living by the owners themselves or for renting/leasing it out for a steady income, necessitates huge money as down payment to the seller of the property.

In the United States, arising out of the Government policy, the citizens of U.S. are encouraged to buy homes of their own, with a view to provide them with houses as a welfare measure. This way the demand and supply is balanced with a steady increase of home ownership in all the States of the U.S. Thus the real estate activity of buying and selling homes is more active in the country, compared to other developing and under-developed countries.

The Federal Governments of U.S. have separate departments by name Housing and Urban Development (HUD) for executing the policy of the Government in providing homes for the homeless. The following are the government sponsored enterprises (GSEs) engaged in the home loan lending activities in U.S.:

• Federal Home Loan Mortgage Corporation: Popularly known as Freddie Mac, sponsored by the United States Government, this is privately owned corporation. This is authorized to lend home loans and loan guarantees for those who wish to avail home-loans from elsewhere. Created in 1970, this is expanding the secondary market in mortgages. Buying the mortgages from the secondary market, pooling them together and selling them as mort-gage backed securities to those investors who wish to invest in real estate open market. Thus lend-able money is made available for new home buyers as a cycle of financial business. As recently as in February 2007, Freddie Mac has imposed conditions for purchase of mortgages only if the borrower qualifies for maximum rate of the loan (and not the introduction rate which is very small) to control sub-prime lending.
• Federal National Mortgage Association: Known as Fannie Mae, this works on the same lines of Freddie Mac, but has been engaged in this business for years and is stated to be ninth largest business in the world.

Both the above agencies are the main sources of home loans in the U.S. assuming a major share of the entire business. The home-buyers have additional options for obtaining loans from Banks, Co-operative Housing societies, Insurance Companies and private lending institutions. A variety of models in home loans such as 10 year terms to 30 year terms, fixed rate of interest and adjustable rate of interest systems, payment of interest only for a certain period, amortizing the balance loan after a specific period etc. are also there. With the advent of internet marketing, the hassles connected with getting a home loan are reduced to a great extent and the intended borrower can make use of the internet right from selecting the appropriate loan suitable to applying for the loan with the concerned institution and getting it sanctioned.