How Will Fannie Mae's First Look Initiative Affect REO Properties?

A few months ago, Fannie Mae announced introduced the First Look Initiative. For new home buyers who are looking to get the best deals on properties before investors get to them, this is good news.

Why?

Because the main goal of this new initiative is to encourage neighborhood stabilization by giving owner occupants a chance to inspect new listings before investors have a chance to submit purchase offers. Owner occupants are home buyers who plan on living in the home and keeping it as their primary residence.

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. It gives owner occupants and public entities who are committed to the community an early opportunity to purchase one of Fannie Mae’s Real Estate Owned properties.

The basic principles of Fannie Mae’s First Look Initiative are:

Reserves the first 15 days of the listings period for owner occupants and buyers using public funds
Gives buyers a chance to renegotiate after obtaining an appraisal with the new reserved contract period
Designed to work with HUDs Neighborhood Stabilization Program (NSP)
Gives a money waiver for public entities and a discount for individuals
Allows an extra 15 days to close a property, extending the original 30 days to 45

Over the last few months, this initiative has been rolled out in several states across the nation. Mostly in states hardest hit by recent foreclosures. By acquiring and rehabilitating homes for resale to home buyers, local governments can stabilize neighborhoods and improve the quality of life for existing residents. This might include acquiring and demolishing structures where repairs aren’t financially feasible, providing the opportunity for future development in the area.

Fannie Mae’s First Look initiative allows local governments to access properties that otherwise would have been lost to third-party investors. It prevents investors from scooping up properties for development or income property opportunities which could continue to have negative effects within the community. Fannie Mae’s First Look process gives families and government assisted buyers the time and easy access they need to gain control of the properties and influence the future of our neighborhoods.

Overall, I think this plan will help make progress toward stabilizing neighborhoods and building stronger communities in this depressed housing market.

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Sincerely,

Mark Shandrow
Real Estate Broker
Shandrow Group
shandrowgroup.com