FHFA Launches Pilot Program to Sell Fannie Mae REO Properties for Rentals
The Federal Housing Finance Agency (FHFA) has announced the first pilot transaction under the Real Estate-Owned (REO) Initiative, targeted to some of the hardest-hit metropolitan areas in Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of Florida. With this next step, pre-qualified investors will be able to submit applications to demonstrate their financial capacity, experience and specific plans for purchasing pools of Fannie Mae foreclosed properties with the requirement to rent the purchased properties for a specified number of years. “This is another important milestone in our initiative designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties, and reduce the supply of REO properties in the marketplace,” said FHFA Acting Director Edward J. DeMarco. In order to ensure compliance with applicable securities laws and regulations, details of the sales announcement will be sent to prequalified investors per FHFA’s Feb. 1 announcement. Subsequently, investors who post a security deposit and sign a confidentiality agreement will gain access to detailed information about the properties. At that stage, interested investors must submit a comprehensive application, which will be reviewed by an outside firm. Only investors who are qualified through this rigorous process will be eligible to bid. “We believe that this initiative holds promise for providing support to local neighborhoods that were especially hard hit by the housing crisis and will help meet the rising demand for rental housing in many communities,” said Michael Stegman, counselor to the Secretary of the Treasury for Housing Finance Policy. Any investors interested in the pilot program who have not prequalified may still do so by completing the forms available on the FHFA REO Initiative page.