Fannie Mae Extends First Look Opportunity for Homebuyers

WASHINGTON, DC — Fannie Mae (FNMA/OTC) announced an important resource for first-time home buyers with its First Look™ program. The two biggest players in the mortgage market, Fannie Mae and Freddie Mac, are now giving non-investor shoppers 20-day exclusive rights to bid on and buy new listings they are selling.

During the 20-day “first look” period, investors will be excluded from submitting bids. To qualify, non-investor buyers will need to commit to making the home their principal residence for at least a year. The idea, according to Fannie and Freddie officials, is to encourage greater owner occupancy, stabilize neighborhoods that have seen significant numbers of foreclosures and generally help out shoppers who find it difficult to outbid all-cash investors.

All-cash purchases of homes hit a high mark last month, according to RealtyTrac, a housing data firm. A stunning 42% of all residential sales nationwide went to buyers who paid cash — the highest rate since RealtyTrac began measuring the phenomenon in early 2011, and nearly double what it was as recently as May.

First-time buyers looking for affordably priced homes have been hit especially hard by the profusion of investors waving cash at sellers. They locate a home that fits their budget, make an offer with a mortgage contingency and then lose the sale to an investor who has no financing requirements. A mortgage contingency ties the contract to the ability of the bidder to obtain a loan, which slows the process and often makes the offer less attractive to the seller.

Fannie and Freddie have large inventories of foreclosed homes for sale — byproducts of the economic woes of 2008-10. As of mid-December, Fannie had roughly 35,000 houses listed for sale around the country through its HomePath (HomePath.com) program. Freddie Mac had 13,000 active listings in its HomeSteps (HomeSteps.com) program. Buyers can access the listings online by state, city and price range, then submit offers through a participating realty agent.

First Look is designed to promote owner occupancy and allows both families and public sector entities to submit offers on Fannie Mae-owned properties without competition from investors. Fannie Mae believes that selling move-in ready properties to owner-occupant buyers contributes to neighborhood stabilization and reduces taxpayer losses.  Prospective buyers can search for properties and easily identify how many days remain on a property’s First Look period by visiting www.HomePath.com. The First Look logo appears next to each qualifying property.

Nevada has a 30-day period for owner-occupants to submit an offer without competition, which will remain unchanged. The change is effective for properties listed on or after January 2, 2014.

Fannie Mae enables people to buy, refinance, or rent a home. Visit https://www.fanniemae.com/progress for more information.