Fannie Mae "First Look" Initiative
Wednesday, 25 November 2009
Fannie Mae has issued the following Press Release titled "Fannie Mae Supports Neighborhood Stabilization Through "First Look" Initiative".
Fannie Mae Supports Neighborhood Stabilization Through "First Look" Initiative
First Look, Other Benefits for Owner Occupants and Buyers Using Public Funds
WASHINGTON, DC — Fannie Mae (FNM/NYSE) today announced that the company has launched several initiatives supporting neighborhood stabilization and promoting home purchases by owner occupants and buyers qualifying for public entity housing programs.
To provide owner occupants and public entities an advantage in purchasing Fannie Mae-owned foreclosed properties, the company has created the First Look initiative. With First Look, only offers from owner occupants and buyers using public funds are considered during the first 15 days a property is on the market. Offers from investors will be considered only 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, Executive Vice President 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."
In addition to First Look, buyers using Neighborhood Stabilization Program (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 the following benefits:
Deposit Waivers - Fannie Mae will waive the earnest money/deposit requirement for public entities using public funds to purchase a Fannie Mae-owned property. Individual homebuyers who have qualified for public funds and want to purchase a Fannie Mae-owned property do not have to meet the usual earnest money/deposit requirement. Deposits for these buyers can be as low as $500.
Reserved Contract Period - Upon receipt of an acceptable offer, buyers have the ability to renegotiate their offer after obtaining an NSP-required appraisal.
Extra Time for Closing - Buyers receive up to 45 days to close — 15 days more than is usually permitted for purchases of Fannie Mae-owned properties.
Fannie Mae's First Look initiative was piloted in August and is rolling out across the country. Initial response to the initiative has been positive.
In Arizona, for example, nonprofit members of the Local Initiatives Support Corporation's Sustainable Home Ownership coalition are using NSP funds to provide counseling, qualifying assistance, and helping working families to find and rehabilitate foreclosed homes. In one example, a young couple with an 18-month-old son, good credit, and savings participated in home buyer education classes in February and individual home buyer counseling in April. The NSP program in the Phoenix metro area was a perfect fit for the family. The family received $20,000 in down payment assistance plus $5,000 in closing costs assistance to purchase their home from Fannie Mae.
In Pasco County, Florida, the Pasco County Community Development Division partners with local nonprofits and uses its NSP funds to acquire and repair foreclosed properties. Once the properties are repaired, the county offers homebuyer assistance, such as gap financing, down payment assistance, or closing cost assistance, to low- to moderate-income buyers. Working with its partners, Pasco County has purchased 10 Fannie Mae properties in the past six months. "Fannie Mae's program allows our nonprofit partners the opportunity to get a slight leg up in obtaining properties for the Neighborhood Stabilization Program," said George Romagnoli, Community Development Manager for Pasco County's Community Development Division.
In Minnesota, the City of St. Paul's Housing and Redevelopment Authority has been stabilizing neighborhoods by acquiring and rehabilitating homes for resale to home buyers; and improving the quality of life for neighborhood residents and providing for future development by acquiring and demolishing structures when repairs are too extensive to be financially feasible. "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 the past four months, the Housing and Redevelopment Authority has closed on five properties and has 24 more offers in process.
