South Florida nonprofit organizations will have the first crack at buying government-owned foreclosed homes in a new program launching Dec. 1, the Federal Housing Finance Agency announced Tuesday.
Normally, the feds auction off foreclosed homes to the general public. Flippers and investors generally win. But a program to let community groups bid first is now launching in South Florida and 17 other major metropolitan areas. The so-called Enhanced First Look program, part of a wider effort called the Neighborhood Stabilization Initiative, was first tested in Detroit and Chicago. It allows nonprofits to rehab, sell, rent and even demolish and rebuild the homes.
Many of the properties have stood empty for months and even years, a continuing blight on the areas hit hardest by the housing crash.
“[The program] is intended to stabilize distressed communities by getting people to live in these properties once again,” said Peter Garuccio, a spokesman for the FHFA. “To achieve this Fannie Mae and Freddie Mac are leveraging the experience and expertise of local community buyers who can determine the best outcome for each property. The ideal outcome is rehabilitation of the property [where necessary] and a new occupant who is either an owner or renter.”
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Freddie Mac and Fannie Mae, the government-controlled housing corporations, owned about 2,000 foreclosed homes valued at less than $75,000 in Miami-Dade, Broward and Palm Beach counties as of Sept. 30. Single-family homes, condos, duplexes and two-to-four-unit buildings are all eligible for the program.
Local community organizations approved by the National Community Stabilization Trust, a national nonprofit partnering with Freddie and Fannie on the initiative, will be able to bid on the homes. They’ll have 12 business days to express an interest in the property and agree on a price. The homes will be sold at fair-market value.