The Department of Housing and Urban Development (HUD) has unveiled a “first look” or right-of-first-refusal program for select state and local governments and nonprofit organizations to purchase foreclosed homes.

The National First Look Program is the first public-private partnership agreement between HUD and the National Community Stabilization Trust.

The program aims to give communities participating in HUD’s Neighborhood Stabilization Program (NSP) a brief exclusive opportunity to buy bank-owned properties in certain neighborhoods so the homes can be rehabilitated, rented, resold, or demolished.

“This groundbreaking agreement will help rebuild neighborhoods that have been struggling with blight and declining home values due to foreclosures,” said HUD Secretary Shaun Donovan in a statement. “Local communities will now get an exclusive option to buy foreclosed properties in targeted neighborhoods so they can turn the homes into affordable housing or, in some cases, tear them down. This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods.”

HUD and the Stabilization Trust, working with different financial servicers, will standardize the acquisition process for NSP grantees, giving them an exclusive option to purchase homes in targeted neighborhoods.

This will help NSP grantees, which include state and local governments and nonprofits, to compete with private investors for properties.

Financial institutions participating in the First Look program include Bank of America, Chase, Citi, Deutsche Bank, GMAC, Nationstar Mortgage, Ocwen Financial Corp., Saxon Mortgage Services. U.S. Bank, Wells Fargo, Fannie Mae, Freddie Mac, and the Federal Housing Administration.

Under the program, NSP grantees will be notified when a property becomes available and will have 24 to 48 hours to express interest in purchasing the property. NSP purchasers will also have the opportunity to buy real estate-owned properties at a discount and with the assistance of NSP funds.

After expressing interest in a property, the first-look period will last about five to 12 business days during which the NSP grantee will conduct inspections and establish costs to repair the property in anticipation of the financial institution’s offer.