Today, approximately 75 percent of REO properties on the market are represented by leading financial institutes in the country. In an effort to help communities hit hard by foreclosures, these financial institutions are working with HUD in a new program called First Look. This program will give communities 48 hours to buy bank foreclosures before they are placed on the public market. 

Communities will be able to buy foreclosures at a 1% discount as well as give them first choice before real estate investors that may stop redevelopment in some scenarios. The First Look Program is a first of its kind building a partnership between public and private sectors. The agreement between HUD and the National Community Stabilization Trust will be in collaboration with national servicers such as Fannie Mae and Freddie Mac. The intention of the First Look Program is to give communities participating in HUD’s Neighborhood Stabilization Program (NSP) the opportunity to purchase bank-owned properties so they can rehabilitated, rent, sell or demolished.

For neighborhoods with a high foreclosure rate and that have been struggling with declining home values, this first of its kind agreement will help them rebuild.  With this exclusive option to buy foreclosed properties, neighborhoods will be able to turn empty homes into affordable housing. Local communities will now have a chance to stabilize those neighborhoods.

The pilot for this program was started in 2008 and is now recognized as a much needed tool for giving a positive spin to neighborhoods hit the hardest by the wave of foreclosures cause by the current economics. First Look was created to be a transparent and streamlined process that would transfer foreclosed and abandoned properties from financial institutions to local government housing providers.

The Neighborhood Stabilization Program (NSP) grantees will also receive aid with a tool that provides a web-based mapping and acquisition management. This tool provides real-time data using an interactive mapping platform and will assist NSP grantees to easily find REO properties.  It will also aid them in making decisions about which properties to purchase.

The grantees of this program will include state and local governments as well as non-profit organizations. With this program HUD and the Stabilization Trust will be working hand in hand with national financial institutes that will standardize the acquisition process for grantees. In the past, grantees have found themselves working against private investors for REO properties hindering any efforts to stabilize high foreclosure neighborhoods.
It is hoped that with the Stabilization Trust working with HUD and the First Look Program, it will be possible to transfer foreclosed properties to local community buyers, and speed up the road to neighborhood recovery.