Freddie to Auction REO Homes to First-Time Homebuyers
Freddie Mac (FRE) and New Vista Asset Management are joining forces to offload two portfolios of real-estate owned (REO) properties currently being held by the GSE. A pair of auctions being held later this month in Las Vegas and Southern California will open the REO properties to either first-time homeowners or owner-occupiers, in a sign that investors are persona non grata. The auctions will be conducted through HomeSteps, Freddie Mac’s real estate sales unit, in partnership with the federal government’s Neighborhood Stabilization Program (NSP). The events are scheduled for April 24 (Las Vegas) and April 25 (California’s Inland Empire). New Vista provides disposition services for REO properties and is helping to facilitate the auctions. "Freddie Mac's first-time homebuyer auctions build on our long-standing effort to use our REO inventory to foster new opportunities for new homeowners and shows another way Freddie Mac is working to achieve the Obama Administration's goals of stabilizing and reviving impacted communities," said Ingrid Beckles, senior vice president of default asset management at Freddie Mac. Under the NSP, homebuyers are eligible for closing costs and down payment assistance when they buy foreclosed or abandoned homes in designated communities that were hit hard by the housing downturn. This federal assistance combined with the federal tax credit will provide the buyer with significant financial advantage in purchasing HomeSteps homes, Freddie Mac said. A morning session of the auctions is open to individuals who pre-qualify for NSP, while a second afternoon session is for homebuyers that intend to occupy the homes as their principle residences. Successful bidders may be able to qualify for the homebuyer tax credit that expires on April 30. Homebuyers must have a contract signed by April 30 and close by June 30 to qualify for the credit. "Together with today's low mortgage rates, these April auctions will families to take advantage of the unique convergence of opportunities that make HomeSteps homes exceptionally attractive values," said Chris Bowden, vice president of HomeSteps. "Working with New Vista underscores Freddie Mac's commitment to manage its REO inventory in a way that helps stabilize communities, fosters homeownership opportunities, and responsibly safeguards tax dollars." In addition to NSP closing cost and down payment incentives, prospective bidders may also take advantage of HomeSteps incentives that provide up to 3.5% of the closing costs and a two-year limited home warranty on homes sold as primary residences, so long as the purchase price of the home is at least $25,000. The warranty covers electrical, plumbing, heating and air conditioning, ductwork, and major appliances. Write to Austin Kilgore. The author held no relevant investments.