The Federal Housing Administration is giving states, cities and nonprofit housing groups participating in HUD's Neighborhood Stabilization Program first crack at bidding on its newly foreclosed properties before they are placed on the market.
The new "First Look Sales Method" will give NSP grantees 14 days to purchase a FHA foreclosed house at a discount of 10% below the appraised value.
"By essentially giving our NSP grantees a first bite of the apple, we hope to accelerate the sale of FHA foreclosed properties while supporting the Obama administration's neighborhood stabilization efforts," said Housing and Urban Development secretary Shaun Donovan.
FHA currently has an inventory of 45,200 foreclosed properties or REO. FHA lenders have foreclosed on more than 60,000 borrowers during the first eight months of fiscal year 2010, up 44% from the same period in FY 2009. (The fiscal year starts October 1 and ends September 30.)
The administration has poured $6 billion into the Neighborhood Stabilization Program to prevent deterioration and blight associated with abandoned properties.
NSP grantees are expected to fix up the properties so they can be rented or sold.
