When Freddie Mac takes possession of a home that foreclosed, they put it in their HomeSteps program. This sales unit, operated by Freddie Mac, markets and sells the home for Freddie Mac. Before the home is available to the general public, though, Freddie Mac offers the First Look Initiative. This program allows owner-occupied borrowers to have the first chance to buy the home.
Keep reading to see what the program offers and how you may qualify.
What Does the First Look Initiative Do?
The First Look Initiative was created to help create stability in certain communities. The program isn’t available throughout the country, but in a select few states for now. Freddie Mac started the program in an effort to sell the foreclosed homes to those that will live in the home themselves. This helps to create a sense of stability in the community, which can hopefully help reduce the number of foreclosures that occur in the area.
The First Look Initiative Process
The First Look Initiative gives owner-occupied borrowers the priority bid during the first 20 days that the home is on the market. This is in an effort to avoid selling the home to an investor that could either rent it out and risk vacancy or that could walk away from their loan if they can’t afford it.
In order to qualify as an owner-occupied borrower, you must first prove that you don’t have another home to live in at the time. You must prove that you will move into the home and live in it as your primary residence. The home is not available to investors or those looking to buy a second home or vacation home, at least during the first 20 days of the listing.
You can view the listing as you would any other MLS listing. You can also see it on the Freddie Mac website. If you want to search specifically for First Look Initiative homes, you can search by location. The system will then show you homes that are in the ‘first look’ phase or are within the 20-day period. If you find a home that Freddie Mac is selling, but it’s no longer in its ‘first look’ phase, you are still free to bid on it; you may just have other competition, such as an investor.
Putting in a Bid
If you want to bid on a First Look home, you will have to use the services of a licensed real estate agent. Only a real estate agent can make the bid for you. While you are free to use any agent you want, it’s best if you use one that is well versed in the First Look program. If you want help finding a licensed real estate agent, you can find one on the HomeSteps website.
If Freddie Mac accepts your bid, you then have to find financing. It’s a good idea to already have a preapproval in place so that you can avoid the risk of losing the home because you don’t have financing. You do have several options when you purchase a First Look home. You can go through the Freddie Mac HomeSteps financing process or you can find your own lender. Either way, you should know what you qualify for and what conditions you have to meet before you even bid on the home.
If you do use HomeSteps financing, you may not need an appraisal and you will only need 5% down on the home. As an added bonus, you won’t pay mortgage insurance on the loan either, even if you just put 5% down on the home.
If you want first dibs on a Freddie Mac foreclosure, you can do so if you are an owner-occupied buyer. The Freddie Mac program encourages the purchase of these homes for those that will live in the home themselves and bring some stability to the community. It’s a simple program that gives you priority if you are looking for a home for you and your family.Click to See the Latest Mortgage Rates»