Thursday, July 15, 2010

Neighborhood Stabilization Programs to Get Discounts on REO Properties

Posted by Carole VanSickle on Thursday, July 15th 2010
HUD announced earlier this week that it will be providing discounts on REO properties to state and local governments and non-profit organizations during the already-established “First Look” viewing period for HUD foreclosed properties . “First Look” is a program that gives these entities a grace period in which they can view the home but other parties cannot. Now, in addition to the grace period, NSP purchasers will receive a 10% discount off the appraised value of the property.

Programs like NSP have traditionally been limited to use by local governments to assist with properties suffering as a result of foreclosure or other financial strain. However, President Obama’s stimulus program expanded the eligible organizations to include disreputable “community organizing” groups like ACORN, which focuses largely on expanding the power base of extremely liberal politicians like Obama himself.

HUD hopes that this addition to the initiative will accelerate the sale of foreclosed HUD homes and support neighborhood stabilization. The First Look period lasts about 2 weeks from the time that the property is conveyed to the FHA, and once the period of time has expired the property can be viewed by and sold to anyone.

Fannie Mae launched a similar initiative in 2009, and both initiatives exclude investors until after the grace period is complete. Fannie Mae’s version focuses on owner-occupant homebuyers.
Do you think it is wise to limit who purchases properties and how they are purchased, even just for a limited period of time? Does this impact your investing strategy or outlook?

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