WASHINGTON HUD (LoanSafe.org) – Federal Housing Administration (FHA) First Look Sales Method for Grantees, Nonprofit Organizations, and Subrecipients under the Neighborhood Stabilization Programs (NSP)
The U.S. Department of Housing and Urban Development (HUD) today announced a new initiative that gives state and local governments, and nonprofit organizations participating in HUD’s Neighborhood Stabilization Program (NSP) preference to acquire homes from the Department’s inventory of foreclosed properties, commonly known as “HUD homes.” The initiative was announced by HUD Secretary Shaun Donovan at the National Council of La Raza annual conference in San Antonio, Texas.
A Notice outlining this temporary initiative will be published this week in the Federal Register. This Notice details how the sale of HUD Homes under the Federal Housing Administration’s (FHA’s) First Look Sales Method will align NSP and FHA requirements to provide NSP grantees an exclusive option to purchase HUD homes before they are marketed to other purchasers.
“This First Look initiative is a marriage of two programs to accelerate our effort to confront property abandonment in communities struggling to overcome the effects of the foreclosure crisis,” said Secretary Donovan. “By essentially giving our NSP grantees a first bite at the apple, we hope to accelerate the sale of FHA’s foreclosed properties while supporting the Obama Administration’s neighborhood stabilization efforts.”
Through the FHA First Look Sales Method, HUD will offer NSP grantees a preference (“First Look”) to acquire available HUD homes within the defined boundaries of NSP-designated areas. Furthermore, First Look will provide NSP purchasers with the opportunity to purchase FHA properties at a discount of 10 percent below their appraised value, less the cost of any applicable listing and sales commissions.
The FHA-NSP First Look period will last approximately 14 days from the conveyance of a property to FHA. Properties that remain unpurchased at the expiration of the First Look period will be listed and sold according to standard FHA procedures. Eligible NSP grantees may acquire these properties with the assistance of NSP funds for any eligible use under NSP, including rental or homeownership. This sales method becomes effective today and continues through May 31, 2013.
HUD’s Neighborhood Stabilization Program was created to address the housing crisis, create jobs, and grow local economies by providing communities with the resources to purchase and rehabilitate vacant homes. NSP grants are helping state and local governments, as well as non-profit developers, acquire land and property; demolish or rehabilitate abandoned properties; and/or offer downpayment and closing cost assistance to low- to middle-income homebuyers. Grantees can also stabilize neighborhoods by creating “land banks” to assemble, temporarily manage, and dispose of foreclosed homes.
FHA employs a variety of methods to sell its foreclosed properties in a manner that expands homeownership opportunities, strengthens neighborhoods and communities, and ensures a maximum return to the mortgage insurance fund. Additional information about the sale and purchase of FHA single family properties is available on HUD’s website.
###
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.
SUMMARY OF THE FHA FIRST LOOK SALES METHOD:
This notice outlines the process by which governmental entities, nonprofit organizations, and subrecipients participating in the Neighborhood Stabilization Program (NSP) (eligible NSP purchasers) are provided a preference to acquire FHA real estate-owned (REO) properties under FHA’s temporary NSP First Look Sales Method. Eligible NSP purchasers may acquire such REO properties for any of the eligible uses under the NSP, including rental or homeownership. Today’s notice also outlines how REO property sales under the FHA First Look Sales Method will be facilitated to ensure that NSP and FHA requirements are met, and to ensure that compliance with these requirements does not impede or otherwise disqualify eligible NSP purchasers from successfully participating in the FHA First Look Sales Method.
While there are currently two separate NSP programs (NSP1 and NSP2) created under their own respective authorizing legislation, for purposes of this notice the term “NSP” shall be used to refer in general to all current or future NSP programs, as well as to their respective eligible program participants.
DATES: The FHA First Look Sales Method announced in this notice shall be in effect from the date of publication of this notice through May 31, 2013.
2
FOR FURTHER INFORMATION CONTACT: Vance T. Morris, Director, Office of Single Family Asset Management, Office of Housing, Department of Housing and Urban Development, 451 7th Street, SW, Room 9172, Washington, DC, 20410; telephone number 202-708-1672 (this is not a toll-free number). Persons with hearing or speech impairments may access this number via TTY by calling the toll-free Federal Information Relay Service at 800- 877-8339.
SUPPLEMENTARY INFORMATION
I. Background
A. Neighborhood Stabilization Program (NSP)
Title III of Division B of the Housing and Economic Recovery Act, 2008 (Pub. L. 110–289, approved July 30, 2008) (HERA) appropriated $3.92 billion for emergency assistance for the redevelopment of abandoned and foreclosed homes and residential properties, and provides under a rule of construction that, unless HERA states otherwise, the grants are to be considered Community Development Block Grant (CDBG) funds. The grant program under Title III is commonly referred to as the Neighborhood Stabilization Program (NSP). HERA authorizes the Secretary to specify alternative requirements to any provision under Title I of the Housing and Community Development Act of 1974, as amended, (42 U.S.C. 5301 et seq.) (HCD Act), except for requirements related to fair housing, nondiscrimination, labor standards, and the environment (including lead-based paint), in accordance with the terms of section 2301 of HERA and for the sole purpose of expediting the use of grant funds.
