Guide
How Do First Look and Owner-Occupant Priority Periods Work?
First Look and owner-occupant priority periods let people who will live in a home bid on HUD, Fannie Mae and Freddie Mac foreclosures before investors can. Fannie Mae and Freddie Mac give owner-occupants 30 days. HUD gives them 15 days on homes that qualify for FHA loans and 5 days on homes that do not.
These programs exist because government-backed sellers want foreclosed homes to go to families, not only to investors with cash. For a buyer using a mortgage, a priority window can be the difference between winning a home and losing it to an all-cash bid. The rules differ by seller, and each one asks you to sign a promise that you will live in the home. Knowing the windows also helps you time your pre-approval and proof of funds. The rest of the REO financing rules are on the page about financing a bank-owned home.
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How Do the First Look Windows Compare by Seller?
The First Look windows compare by seller mainly in their length and in who else, besides owner-occupants, can bid during the window.
| Seller | Window | Who can bid | Occupancy promise |
|---|---|---|---|
| Fannie Mae (HomePath) | First 30 days | Owner-occupants, public entities and nonprofits | Must live in the home as a main residence |
| Freddie Mac (HomeSteps) | First 30 days on the MLS | Owner-occupants, public entities, NSP grantees and nonprofits | Signed primary residence affidavit |
| HUD, insured or insured with escrow | 15 days | Owner-occupants, government entities and HUD-approved nonprofits | Live there at least 12 months |
| HUD, uninsured | 5 days | Owner-occupants, government entities and HUD-approved nonprofits | Live there at least 12 months |
| Private bank REO | Usually none | Anyone | Set by the seller |
The FHFA extended the First Look period for Fannie Mae and Freddie Mac to 30 days in 2021. Older articles that mention 15 or 20 days describe earlier rules.
How Does Freddie Mac’s First Look Work?
Freddie Mac’s First Look lets owner-occupants and certain public and nonprofit buyers buy HomeSteps homes during the first 30 days on the market without competing against investors.
The HomeSteps First Look page says the buyer does not need to be a first-time buyer, only someone buying a main residence. Multi-family homes are excluded. The buyer and the selling agent sign an affidavit confirming the buyer will live in the home. Eligible homes are marked with an icon on HomeSteps.com, and your agent can tell you how many days remain.
How Does HUD’s Exclusive Listing Period Work?
HUD’s exclusive listing period lets owner-occupants, government entities and HUD-approved nonprofits bid first, for 15 days on insured homes and 5 days on uninsured homes. For an owner-occupant, that window is the best chance to buy without competing against cash investors.
HUD’s Handbook 4000.1 requires owner-occupant buyers to certify they will live in the home as their main residence for at least 12 months and that they have not bought a HUD home as an owner-occupant in the past 24 months. On insured homes, bids from the first 10 days are opened together the next business day, so there is no prize for bidding on day one. HUD picks the bid with the best net return that meets its terms. The full HUD buying rules are in FHA loans for foreclosures and HUD homes.
How Do You Make the Most of a First Look Window?
You make the most of a First Look window by getting pre-approved before you shop, having your proof of funds ready and making a clean offer early in the window.
Owner-occupants compete with each other during the window, so price still matters. Ask for HomePath or HomeSteps buyer incentives if any are offered. Read proof of funds letters for what to send with your offer, and what banks require from financed buyers for the seller paperwork that follows.
Example
The following is a fictional example. Rosa sees a Freddie Mac home listed on day 3 of its First Look window. She already has a pre-approval for a conventional loan with 5% down.
Her agent submits the offer with her pre-approval and the signed primary residence affidavit. Two other owner-occupants bid, and Rosa’s offer, slightly over list price with a 30-day close, is accepted before any investor can bid.
FAQ
Can Investors Buy During a First Look Period?
No. During First Look and HUD’s exclusive listing period, only owner-occupants and certain public and nonprofit buyers can have offers accepted. Investors can bid once the period ends if the home is still for sale.
What Happens If You Lie About Living in the Home?
Falsely certifying that you will live in a HUD, Fannie Mae or Freddie Mac home can lead to penalties, including fines and possible prosecution for fraud. The certifications are signed under penalty of law.
Do Bank-Owned Homes Have First Look Periods?
Usually not. Private banks and servicers set their own rules, and most do not give owner-occupants a formal priority window. Some offer owner-occupant incentives instead, so ask the listing agent.
How Do You Know How Many First Look Days Are Left?
Ask your agent to check the listing date in the MLS or call the listing agent. HomeSteps marks eligible homes with an icon, and HUD listings show the bid period on HUD Homes for Sale.
Sources
- FHFA Extends the Enterprises’ REO First Look Period to 30 Days. Federal Housing Finance Agency. https://www.fhfa.gov/news/news-release/fhfa-extends-the-enterprises-reo-first-look-period-to-30-days
- HomeSteps First Look Initiative. Freddie Mac. https://www.homesteps.com/homebuyer/firstlook
- HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Update 18). U.S. Department of Housing and Urban Development. https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
This page explains general loan rules and is not financial advice. Lenders set their own requirements, so confirm the rates, fees and terms with a lender before you apply.