Fannie Mae Supports Neighborhood Stabilization Through 'First Look' Initiative

WASHINGTON, Nov. 24 /PRNewswire-FirstCall/ -- Fannie Mae (NYSE: FNM) 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.