In an effort to support neighborhood stabilization and provide owner occupants and public entities an advantage in purchasing Fannie Mae-owned foreclosed properties, the company announced Tuesday the launch of its First Look Initiative.
Through Fannie Mae’s First Look, only offers from owner occupants and buyers using public funds will be considered during the first 15 days a property is on the market, and offers from investors will only be considered after the first 15 days have passed.
“First Look provides owner occupants and public entities that are committed to the community an early opportunity to purchase one of Fannie Mae’s Real Estate Owned properties,” said Terry Edwards, EVP for Credit Portfolio Management at Fannie Mae. “As a result, we believe First Look will help us make progress toward stabilizing neighborhoods and building stronger communities in this difficult market.
The First Look Initiative was piloted in August and is receiving positive initial responses in its spread across the nation.
In Arizona, Neighborhood Stabilization Program (NSP) funds are being used by nonprofit members of the Local Initiatives Support Corporation’s Sustainable Home Ownership coalition, helping working families find and rehabilitate foreclosed homes through counseling and qualifying assistance. In one example, a young couple with a child participated in home buyer education classes and individual home buyer counseling, and as a result of NSP funds, the family received more than $20,000 in down payment assistance and $5,000 towards closing costs to purchase their home from Fannie Mae.
In Pasco County, Florida, the Paso County community development division has partnered with local nonprofits and uses NSP funds to acquire and repair foreclosed properties. After repair, the county offers homebuyer assistance for low to moderate-income buyers. This joint effort has allowed Pasco County to purchase 10 properties from Fannie Mae in the past six months.
George Romagnoli, community development manager for Pasco County’s community development division, said “Fannie Mae’s program allows our nonprofit partners the opportunity to get a slight leg up in obtaining properties for the Neighborhood Stabilization Program.”
By acquiring and rehabilitating homes for resale to home buyers, the city of St. Paul’s housing and redevelopment authority in Minnesota has been stabilizing neighborhoods and improving the quality of life for residents. Additionally, the authority has acquired and demolished structures where repairs are not financially feasible, providing the opportunity for future development in the area. The housing and redevelopment authority has closed on five properties in the past four months and has 24 more offers in the process.
“Fannie Mae’s First Look initiative has allowed us to access properties that otherwise would have been lost to us and very possibly used in a way that would continue to have negative effects in the communities,” said Sheri Pemberton-Hoiby, senior project manager with the city of St. Paul. “Fannie Mae’s First Look process gives us the time and easy access needed to gain control of the properties and allows us to influence the future of our neighborhoods. Plus, we have the ability to work directly with Fannie Mae representatives if issues arise.”
In addition to First Look, buyers using NSP funds from the U.S. Department of Housing and Urban Development’s (HUD) Community Development Block Grant (CDBG) program, HOME Investment Partnerships Program funds from HUD, local housing trust funds, or charitable foundation funds may also qualify for additional benefits.
Fannie Mae will waive the earnest money and deposit requirement for public entities using public funds to purchase a Fannie Mae-owned property, and upon receipt of an acceptable offer, buyers will have the ability to renegotiate their offer after obtaining an NSP-required appraisal. Buyers purchasing these properties will also receive up to 45 days to close, 15 more days than is usually permitted.
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