Freddie Mac Launches New Rental Initiative To Lease Homes
McLean, VA-Freddie Mac has launched its new REO rental initiative giving qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis.
The initiative will be managed by HomeSteps, Freddie Mac's national real estate unit, and implemented through several national property management firms. Freddie Mac will continue to suspend all eviction actions until April 1, 2009 to ensure there is ample time for occupants to learn about the options available to them.
Property management firms will begin the process of contacting occupants to determine their interest in staying in the home and their eligibility for a month-to-month lease. To qualify for a lease, the tenant or former owner must occupy the property and show they have adequate income to pay the monthly rental amount established by the property management company based on market rents for the area where the home is located.
"Freddie Mac's REO rental initiative can help ease a foreclosure's impact by giving renters and former owners more time to determine what options are best for them and their families," said Ingrid Beckles, senior vice president, default asset management at Freddie Mac. "At the same time, the REO rental initiative helps stabilize property values and local communities by keeping homes occupied and less vulnerable to vandalism."
Occupants must agree to allow HomeSteps to show the home to potential buyers as it will be marketed for sale during the lease period. If an occupant does not wish to lease the property, Freddie Mac will continue its current practice of offering relocation assistance. In addition, Freddie Mac will also explore available workout options with owner-occupants after Freddie Mac gains title to the property through foreclosure. Additionally the home must be in safe, habitable condition and meet all local codes for rental properties to qualify for the REO rental initiative.
In other Freddie Mac news, as part of the Obama administration's Making Home Affordable plan, the GSE is suspending foreclosure sales on mortgages eligible for the Home Affordable Modification program.
It had previously said suspension of foreclosure sales on occupied properties would expire on March 6. Specifically, Freddie Mac will instruct its servicers not to complete a foreclosure sale on a mortgage eligible for the Home Affordable Modification program unless they completed their effort to contact the borrower.