By: Brittany Dunn
A new initiative announced Monday by HUD will give state and local governments and nonprofit organizations
participating in the department’s Neighborhood Stabilization Program (NSP) preference to acquire homes from its inventory of foreclosed properties at discounted rates.
Touted as the “First Look” initiative, this temporary program will align NSP and Federal Housing Administration (FHA) requirements to provide NSP grantees an exclusive option to purchase HUD’s REO properties – commonly known as “HUD homes” – before they are marketed to other purchasers. Furthermore, NSP purchasers will be given a 10 percent discount off the appraised value of these properties.
“This First Look initiative is a marriage of two programs to accelerate our effort to confront property abandonment in communities struggling to overcome the effects of the foreclosure crisis,” said HUD Secretary Shaun Donovan. “By essentially giving our NSP grantees a first bite at the
apple, we hope to accelerate the sale of FHA’s foreclosed properties while supporting the Obama Administration’s neighborhood stabilization efforts.”
The FHA-NSP First Look period will last approximately 14 days from the conveyance of a property to FHA. Properties that are not purchased at the expiration of this period will be listed and sold according to standard FHA procedures.
Eligible NSP grantees may acquire these properties with the assistance of NSP funds for any eligible use under NSP, including rental or homeownership. This sales method becomes effective July 12, 2010 and will continue through May 31, 2013.
HUD’s new program is similar to Fannie Mae’s First Look initiative, which was launched In November 2009. Both programs aim to support neighborhood stabilization, but Fannie Mae’s buyer eligibility and timelines are different than HUD’s. Under Fannie Mae’s First Look program, only offers from owner-occupants and buyers using public funds are considered during the first 15 days a property is on the market, and this timeline was extended to 30 days in Nevada. Offers from investors are considered only after this initial window has passed.
As DSNews.com previously reported, the government-sponsored enterprise had some snags in its program, mostly because interested buyers and public entities were unable to view multiple listing services. As a result, these buyers were unaware of when properties were listed, and they didn’t know when the 15-day First Look window ended. To fix this problem, Fannie Mae now tracks the First Look window based on days listed on its REO marketing site HomePath.com, which all buyers have access to.
Tue, Jul 13, 2010
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