The 155 Rhode Island properties listed on Fannie Mae’s Homepath website late last month offer an advantage for buyers planning to occupy their homes, as well as for nonprofits and public entities, such as land trusts: They have 20 days for a “First Look” to make an offer before the property goes on the open market and is available to investors.
The properties, previously foreclosed on, included a starter or retirement home in Coventry listed at $114,900, a house in Bristol for $299,900 and an East Greenwich home for $315,000. The First Look period was recently extended from 15 to 20 days for properties listed on or after Jan. 2, 2014.
“It’s an important goal of ours to sell to owner-occupants or nonprofits. We repair a lot of these properties to make them more marketable,” said Andrew Wilson, spokesman for Fannie Mae in Washington, D.C.
First Look is a community-stabilization program that took effect in 2009. When mortgages financed by Fannie Mae go into foreclosure and the organization acquires the property, a first step is often repairs or clearing up legal questions on title or liens. Then Fannie Mae lists the foreclosed property for sale through a local real estate broker.
One Rhode Island nonprofit that’s taken advantage of First Look is House of Hope Community Development Corp. in Warwick, an organization whose mission is to prevent and end homelessness through innovative programs in housing and support services.
“The major advantage of First Look is that it gives us an opportunity to make an offer and start a negotiation, whereas we may not be able to compete in a completely open market,” said Taylor Ellis, housing-development manager for House of Hope, which currently owns about 40 rental properties.
“We bought two properties through First Look. One is a single-family home in the Norwood section of Warwick that’s currently being used as a rental property for a family that was homeless,” said Ellis. The other is a duplex on West Street in the Pontiac Historic District in Warwick, purchased by House of Hope in 2009 for $155,000.
“We did a complete renovation of the property on West Street. It had to be fully gutted,” said Ellis.
The sheer volume of single-family homes in Warwick makes it prime territory for foreclosures and investors, he said.
“A lot of these homes would potentially get snapped up by people who are flipping them,” said Ellis. Those are properties bought at a relatively low price by investors, who often upgrade them to varying degrees and resell them quickly at a profit.
“We try to acquire properties and make an investment so they can be sustainable for the long-term for low- to-moderate income families. We try to renovate it for a 20-year period, so there shouldn’t need to be any capital improvements,” said Ellis. “If the roof is bad, we try to put on a new roof. We try to convert the heating to natural gas because that’s the cheapest right now.”
One family in the West Street duplex is Marion Brooks and her two adult children, one of them with Down syndrome.
A few years ago, Brooks was homeless after she fell behind on rent payments, was evicted and was staying in a temporary family shelter. The family moved into one of House of Hope’s supportive rental units.
Family life has stabilized. Brooks has been working at a college bookstore, both of her children have graduated from high school. Her son is a student at New England Institute of Technology and her daughter participates in Special Olympics and other community programs.
In February 2013, the family graduated from supportive housing to one of House of Hope’s independent affordable rentals – one of the units in the rehabbed West Street duplex.
Real estate broker Don Morash of Abbott Properties in Warwick has several listings on the Fannie Mae Homepath website that are First Look properties. But First Look hasn’t been what gets people to call him.
“No one has ever said, ‘I’m calling about First Look.’ The buyers usually just saw the home on the Fannie Mae website,” said Morash.
Foreclosures have slowed in Rhode Island, as they have in many places across the nation, but the First Look program continues to have advantages, he said.
Morash said the First Look policy for owner-occupant requires a certificate stating the person will live in the home for at least a year.
“We believe homebuyers who intend to live in the home make a lasting and positive impact on their neighborhoods and will help to stabilize Rhode Island communities,” Fannie Mae Foreclosure Prevention Specialist Richard Staples said in an email. “We believe investors play an important role in the market, but owner-occupants make an immediate and lasting commitment to the community and should have the first chance to buy.” •
