The Federal Housing Finance Agency announced Wednesday that investors interested in participating in a program to convert real estate owned properties into rental homes could begin pre-qualifying for this initiative now.
In August, FHFA called for a request for information seeking ways to solicit ideas for sales, joint ventures or other strategies to augment and enhance REO asset disposition programs of Fannie Mae, Freddie Mac and the Federal Housing Administration.
Through the end of the third quarter, Fannie Mae and Freddie Mac owned more than 180,000 REO properties nationwide while the Department of Housing and Urban Development had possessed approximately 40,000 homes through foreclosure or REO.
After more than 4,000 responses to the RFI, the FHFA has decided to begin this REO initiative in which qualified investors can purchase pools of foreclosed properties in some of the hardest hit metropolitan areas and sell these housing units as rentals for a specified number of years.
According to the FHFA, this rental program could provide relief for local housing markets that have been hit with a large volume of foreclosed properties.
“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,” said Edward DeMarco, acting director of the FHFA.
In order to pre-qualify for this program, FHFA is looking for investors that have the financial capability to acquire these assets and who have sufficient experience and knowledge in similar business matters to analyze and bear the risks of this type of investment opportunity. The pre-qualification phase also requires investors to keep certain information about the FHFA's REO initiative confidential.
