White House, FHFA Seeking Proposals on GSE 'REO Rentals'
The Obama administration is seeking ideas from market participants on how Fannie Mae, Freddie Mac and FHA can employ bulk sales of foreclosed homes, turning these units into rentals that will help stabilize local housing markets.
The Federal Housing Finance Agency believes that partnerships or joint ventures with the GSEs may be the must effective way to reduce losses to taxpayers and bring liquidity to housing markets. But the GSE regulator also is seeking public recommendations for other strategies. The deadline for submitting ideas is September 15.
Private partners would be responsible for day-to-day management and maintenance of the rental properties.
FHFA and FHA are considering bulk sales of one- to four-family homes and condominiums that would range in size from $50 million and (in the case of joint ventures) up to $1 billion.
Housing secretary Shaun Donovan pointed out that the cost of renting is going up while foreclosed homes are standing empty putting downward pressure on housing prices.
"Taking steps to encourage private investment in REO properties and transition them into productive use will help stabilize neighborhoods and home values at a critical time for our economy," Donovan said.