Discount Realty

Home ownership is part of the American dream. Living on your own property is not only a status symbol, but is also a strong financial investment and something that can be passed on to your children. For these reasons, the real estate business is a busy and sometimes confusing industry.

Very few people can afford to buy property at list value. Most homeowners take out mortgages--home loans with a life of about 30 years--to pay for their homes. Even with a mortgage, real estate may seem out of reach for many middle- and low-income Americans. Thankfully, this is not always the case, and there are several options for discount realty, as well as assistance from the government.

Foreclosures and Discount Realty

Many people who qualify for mortgages end up not being able to pay for them. Circumstances vary, but it is estimated that at any time, almost one percent of American homes are in danger of foreclosure. When a mortgage is delinquent, the bank will repossess the property, close the mortgage, and evict the residents.

Banks don't like to hold illiquid assets like property, so foreclosure properties are sold quickly. Banks usually auction off foreclosure properties for minimal profit, instead looking to make back the remainder of the loan. Many people have made fortunes by buying up foreclosed properties, fixing them up, and selling them off. Many more have found secure and affordable homes by checking up on foreclosures.

The Fannie Mae Foundation

Founded in the 1930s by the Federal government, the Fannie Mae Foundation was created to help American families achieve the dream of home ownership. In 1968, it split with the government, and is now controlled by a board of trustees and stock is traded on an open market. Today, Fannie Mae works to ensure that all Americans can get the mortgages they need to purchase affordable homes.

Fannie Mae accomplishes this primarily by investing in mortgages (not by lending itself). This practice essentially floods the market with money, ensuring that there will never be a shortage of funds for mortgage loans. Fannie Mae also buys up foreclosure homes and sells them to first time homeowners, often at prices well below the appraised value of the home.

The Department of Housing and Urban Development

With the privatization of Fannie Mae, the main government housing authority became the Department of Housing and Urban Development. This office has the responsibility for policing housing equality, as well as building opportunities for home ownership. They accomplish this by providing legal assistance and financial aid, in addition to building homes to sell to those in need.

Those under the protection of HUD include racial minorities, people with HIV/AIDS, as well as the elderly, disabled, and people looking to buy homes for the first time. They also provide help for the homeless. Homes provided by HUD are returned to HUD if they are foreclosed upon. Thus, low-cost homes can often be found from HUD by looking at their foreclosure listings, which are available to all real estate agents.