Buyers looking for a good deal on a foreclosure now have a little help, thanks to Fannie Mae.
The housing giant recently introduced "First Look," a nationwide initiative that restricts offers on all Fannie Mae-owned properties to potential owner-occupants -- rather than investors -- during the first 15 days on the market.
"We believe First Look will help us make progress toward stabilizing neighborhoods and building stronger communities in this difficult market," says Terry Edwards, executive vice president for credit portfolio management at Fannie Mae.In the current market, sellers have been attracted to investors because they fear that deals attached to a mortgage loan may fall through, says Amy Stanley, a Realtor with Coldwell Banker Residential Brokerage in Manassas, Va.
"Usually, investors are offering to pay cash, so it's not hard to see why those offers are accepted," she says.
As a result, many potential owner-occupants have become frustrated at their inability to purchase a home, Stanley says.
"In 2009, many first-time buyers I was working with just gave up on buying a home after dozens of offers had been rejected in favor of investor offers," she says.
First Look aims to reverse that trend by limiting early offers to individual buyers or organizations using public or charitable funds for the purchase.
"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," Edwards says.
Finding and financing a propertyTo find a Fannie Mae foreclosure, check out the company's Web site, which lists all active Fannie Mae-owned properties, including townhomes, condominiums and single-family homes. Buyers can search by price and location.
Home shoppers also can sign up for free daily e-mail alerts by ZIP code that notify them when properties go on the market. E-mail alerts can be sent to the buyer's real estate agent through the site.
While Fannie Mae properties are sold "as is," the company's homes are generally in better condition than other foreclosures, Stanley says. Fannie Mae makes repairs to increase the marketability of its properties, but still recommends shoppers have a home inspection before buying a property.
Other requirements for purchasing a Fannie Mae foreclosure include:
- Buyers need to work with a real estate agent to submit an offer to the listing agent identified on the HomePath site.
- No offers will be accepted if they are contingent on the sale of a buyer's current home.
- Buyers are required to have a prequalification statement from a lender.
Fannie Mae's foreclosure Web site includes information about financing. Many, but not all, properties are eligible for a Fannie Mae HomePath Mortgage or a HomePath Renovation Mortgage (which wraps repair costs into the loan). Eligible properties have the HomePath Mortgage logo next to the listing.