Home Buying in Grand Rapids>Question Details

Sandy Cumming, Other/Just Looking in Ferndale, MI

HUD and Fannie Mae/Freddie Mac Homepath property rules

Asked by Sandy Cumming, Ferndale, MI Mon Jul 25, 2011

We're trying to buy a second home in an area where most houses are HUD or Fannie Mae/Freddie Mac. We are absolutely NOT going to rent it out. We need another home to live in 8 days a month to visit my boyfriend's kids in a town 2.5 hours from our main home. We're getting push back from real estate agents who say we can't bid on the homes during the First Look Initiatives because it isn't our primary home. But, I thought that was just to keep Investors/Rentlords out for the first 2 weeks. Can anyone clarify the rules and/or let us know how we can work around them?

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It is hard for me to believe that all these Realtors DO NOT KNOW what they are talikng about! You CAN buy during the 15 day period if you are buying a second home. Here's an excerpt from HUD's rules on thier web site:

First Look Eligibility and Identification
During the first 15 days (30 days in Nevada), a home is listed for sale in the Multiple Listing Service ("MLS"), HomeSteps will consider purchase offers from owner-occupants, second home purchasers, public entities or their designated partners. Buyers intending to purchase the property for investment or similar purposes may submit offers to the listing broker and HomeSteps will consider them after the initial 15 listing days have expired.
0 votes Thank Flag Link Sun Aug 28, 2011
Fannie Mae and HUD rules are different. Fannie Mae's First Look Initiative is for the first 15 days that the property is listed. HUD owner occupant only period lasts for the first 30 days of the listing. The only exception to this rule for HUD homes is when the repair escrow for the home exceeds $5,000's. These properties are available to investors after only five days. We offer free HUD classes for owner occupants and investors in our office. Contact me if you are interested in attending.
0 votes Thank Flag Link Tue Sep 6, 2011
First look doesn't last forever. I list both HUD and Fannie Mae homes and many of these homes are still available after the first look initiative expires. Working around the rules isn't a possibility either. There are stiffl penalties for not being upfront on the question of the home being your primary home or not. I would still look at these homes but be ready with an offer as soon as the First look initiative expires. Unfortunately someone looking for a home as their primary residence will always receive preference over someone looking to buy a second home. It does make things difficult but not imposssible.
Don't limit yourself to searching for only HUD homes or Fannie Mae properties either (although those may be the prominent homes in your area). Many lender owned properties are a good deal as well. There are even some good deals on non foreclosed properties.
0 votes Thank Flag Link Mon Jul 25, 2011
Sandy,

The Grand Rapids area has a lot of homes to offer that are not HUD/First Look. There are many homes that are traditional sales as well as bank owned properties that either require a shorter "owner occupied" period or no waiting period at all. I would be happy to help you find that perfect 2nd home, please contact me and we can start looking right away.

Kris Rillema
Leading Edge Realty LLC
Cell: 616.550.6037
KrisRillema@gmail.com
0 votes Thank Flag Link Mon Jul 25, 2011
Unfortunately, since you already have a home that you are claiming your PRE (Principal Residence Exemption) you would not qualify for the First Look Initiative guidelines. Yes, this initiative was created mostly to keep investors from taking properties from owner-occupants, but it is also to allow people who will be occupying the home as their primary residence to have a chance to buy it. If you are looking for HUD homes in the Grand Rapids area, I would be happy to show you a few that have been on the market for more than 15 days. With how many are in the area, there are still some really good deals out there that are no longer in the First Look stages.
0 votes Thank Flag Link Mon Jul 25, 2011
Hi,

Thanks for so quickly squashing my dreams ;) But, can you offer any advice on how we can find a low-priced home in a mainly HUD/Firstlook market?
0 votes Thank Flag Link Mon Jul 25, 2011
Sandy:

Unfortunately since it won't be your primary residence you cannot qualify during the First Look Initiative.

Sorry,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
0 votes Thank Flag Link Mon Jul 25, 2011
You already have a home and you already receive Exemptions on it as it is your primary residence. So yes you are not qualified under those rules! Sorry, there are tight rules and for good reasons, accept it!
0 votes Thank Flag Link Mon Jul 25, 2011
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