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Fannie Mae repairs foreclosed Florida homes to attract buyers

One of Florida's biggest property owners is repairing foreclosed houses, hoping to attract buyers, bolster values and enhance neighborhoods.

Fannie Mae, one of the government-sponsored entities that buys and insures mortgages, is replacing carpet, paint and appliances in many of the 9,510 homes it owns in the Sunshine State before they hit the market.

Many foreclosed homes have long been eyesores, ill-maintained and vandalized by thieves or their former owners. That drags down sales prices, along with the prices of neighboring properties.

"Our goal is to make them more attractive," said Amy Bonitatibus, a Fannie Mae spokeswoman. "We've seen an uptick in sales as a result of this. We don't want to drag home values down anymore."

Fannie Mae repaired more than 87,000 homes nationwide last year. It did not have a breakdown for Florida.

It also does not track how many taxpayer dollars it spends on fixing foreclosed homes. It lumps the figure into other foreclosure costs, like taxes and fees. Those costs topped more than $400 million last year.

The repairs are bringing in more first-time buyers in the Tampa Bay area, since the houses are move-in ready, real estate agents say.

"It's nice when a client walks in and realizes they don't have to do much," said Rae Catanese of Tropical Prudential Realty in South Tampa. "Fannie is making them livable. It looks like they are stepping up the pace."

At the end of June, Fannie Mae owned 136,000 homes in the United States as a result of buyers defaulting on insured mortgages. Banks foreclosed on the properties and then collected on the insurance from Fannie Mae, giving ownership to the agency.

Most of the houses are in states hit hardest by foreclosures, including California, Nevada, Arizona and Florida.

In housing markets saddled with lots of foreclosed properties, investors buy most homes because banks will not make repairs.

That shuts out many individual buyers who depend on government-backed mortgages.

But Fannie Mae is wooing owner occupants, hoping to promote homeownership and neighborhood revitalization.

As of Wednesday, Fannie Mae had 509 homes for sale in Citrus, Hernando, Hillsborough, Pasco and Pinellas counties. Prices range from about $30,000 to more than $300,000.

Rick Murphy, director of Fannie Mae's foreclosed homes in Florida and Georgia, said properties needing extensive fixes likely will still be sold to investors, who will make repairs and then rent the homes.

Although those purchases move the foreclosed homes off Fannie's books, it does not stabilize neighborhood values since investors will hold the properties until the housing market improves, he added.

He said the agency does not expect a dollar-for-dollar return on the repairs since the goal is to make them livable for owner occupants.

"We are trying to stop the circles of foreclosure," Murphy said "We want to attract people, not repel people."

Kyle Klemmick of Florida REO Group in Palm Harbor has been selling Fannie homes for two years and has listings for 20 to 30 at a time. He said the foreclosed homes that are repaired will help bolster the housing market.

"They show better and get more buyer attention," he said. "This is a good thing."

Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459. Follow him on Twitter at twitter.com/markpuente.

Fannie Mae homes in Tampa Bay counties

Citrus 46

Hernando 39

Hillsborough 190

Pasco 113

Pinellas 121

.Incentives

Fannie Mae offers

• A down payment of only 3 percent.

• Up to 3.5 percent in closing costs through the end of October. Real estate agents are also paid a $1,200 bonus.

• Borrowers can apply for a renovation mortgage, which can include up to $35,000 for repairs.

• Some homes can be purchased with no lender-requested appraisal and no mortgage insurance.

• All the houses are listed at www.homepath.com.

Fannie Mae repairs foreclosed Florida homes to attract buyers 09/17/11 [Last modified: Monday, September 19, 2011 9:03am]
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