Property Acquisition

Program Overview

Since 2008, NCST has administered its national REO Property Acquisition Program, which links the REO inventories of financial institutions (REO Sellers) with local housing providers who seek to acquire foreclosed or abandoned properties within designated, targeted areas to stabilize neighborhoods. NCST facilitates the transfer of these foreclosed and abandoned property from the REO Sellers to the local providers engaged in neighborhood stabilization.

The REO Property Acquisition program is the nation’s only scalable program to establish a systematic, predictable, and transparent means of moving properties from REO sellers to local housing providers. The program permits the cost-effective and transparent purchase of these properties through programs that include First Look and the Donation Program. Some of these efforts are tied to the federal Neighborhood Stabilization Program.

NCST maintains relationships with the financial institutions and also has an established set of processes and procedures to facilitate the offer process and ensure that the program guidelines are met.


Program Goals

  • To assist local government, non-profit and socially motivated for-profit organizations efficiently acquire vacant and foreclosed properties.

  • To stabilize neighborhoods devastated by foreclosures and abandonment.

  • To collaborate with financial institutions to serve as an efficient national conduit for REO transfers.

  • To work with local community buyers to maximize certainty of execution on property transactions.


Tenets of the Property Acquisition Program
 

Strategy and Capacity

The REO Property Acquisition Program helps local housing providers access available REO properties and provides a streamlined path for communities to purchase those properties for the purposes of renovation and reuse as affordable housing.

The Stabilization Trust offers community buyers two programs to access the right kinds of properties to make a positive impact in distressed neighborhoods:

First Look – Community Buyers receive an exclusive view of newly available REO properties in target neighborhoods from select financial institutions, before those properties are listed for sale on the open market. This allows the community to be in the ‘driver’s seat’ and take control over the outcome of distressed properties that will make the most important difference to neighborhood stability.

Donation Property Contributions –To supplement the purchase of REO properties in neighborhoods of greatest need, participating financial institutions make available vacant REO properties for donation to eligible organizations.

Quick and Certain Sales

The Stabilization Trust has established a purchase methodology with the nation’s largest financial institutions to give community buyers a predictable and transparent means to acquire REO properties. Communities can acquire REO properties with greater confidence and certainty through the Stabilization Trust. The Stabilization Trust safeguards communities from investor competition on ‘First Look’ properties, which allows them to benefit from increased savings on sales prices, and an easier transaction process conserves the time and resources of staff.

Innovative Technology

The Stabilization Trust makes the work of neighborhood stabilization easier for communities through REOMatch™, the online mapping and property acquisition tool. Through REOMatch, communities are able map target neighborhood boundaries down to the street level, view newly available ‘First Look’ properties that become available within exact target neighborhoods, and manage the entire property acquisition process for all properties accessed through the Stabilization Trust.


Key Strategies for Neighborhood Stabilization: 

How the REO Property Acquisition Program Makes a Difference

  • For neighborhood stabilization efforts to be most effective, they should be concentrated. Local housing providers should focus on key houses within tightly targeted neighborhoods.

  • To make a true difference in neighborhoods with high levels of foreclosures and abandoned properties, local housing providers and developers need to access to troubled properties. Coordinated participation from all mortgage servicers or investors gives communities a better chance at creating solutions for vacant or foreclosed properties through renovation and reuse, and this increases the likelihood of community efforts to be successful.

  • Local governments and non-profit organizations benefit from advantages provided by the Stabilization Trust. Outside of the REO Property Acquisition Program, higher acquisition costs and increased competition for REO properties can diminish the impact of community based stabilization strategies.

  • A stabilized neighborhood benefits all property holders (homeowners, renters, servicers and investors) within its boundaries. Local housing providers should devise strategies with the goal to efficiently use available resources and comprehensively address impacted neighborhoods.

See where the Stabilization Trust is supporting neighborhood stabilization activities across the U.S. 

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Take the Freddie Mac CreditSmart online training course to help you achieve your financial and homeownership goals.

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Learn more about access to flexible financing for local neighborhood stabilization programs.

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