If everything goes according to plan, real estate investors will have more competitors when it comes to buying foreclosed properties.

Major banks and lenders have expressed agreement to a proposal to give local governments and nonprofit groups the chance to buy foreclosed homes before these properties are sold to private investors. Mortgage giants Bank of America Corp. and Wells Fargo & Co. are just some of the leading financial institutions that have shown support to the program.

The Obama administration has given its blessing for local governments and non-profit organizations, who are often outbid by speculators, to purchase foreclosures ahead of private investors. It says the move could greatly benefit the said group as they could generate profits by renovating foreclosed homes or using the land for redevelopment projects. Congress has allocated $7 billion for the purchase of these homes.

“This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods,” said Housing and Urban Development Secretary Shaun Donovan.

According to Donovan, about 100,000 residential properties that were repossessed by banks and lenders will be sold through the program. The non-profit National Communication Stabilization Trust will gather information about foreclosed homes and help local groups to determine and identify which properties to purchase. Prospective buyers will be given up to 48 hours, or two days, to evaluate a property.

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