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Tapping into the Rental Market with Foreclosed Homes
In an effort to soften the blow of widespread foreclosures, Fannie Mae is piloting a program to sell homes en masse to investors willing to manage them as rental properties. The Federal Housing Finance Agency, which oversees Fannie, announced the first round of sales on Monday, which will include 2,490 homes throughout eight urban regions.
"Investors will be able to submit bids on the entire portfolio of properties," report Zibel and Timiraos, "but also will be able to submit offers on all the properties in any given market." Those markets include Los Angeles and Riverside, Atlanta, Phoenix, Las Vegas, Chicago, and three regions in Florida.
FHFA Acting Director Edward DeMarco explained that the program was "designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties, and reduce the supply of [foreclosed] properties in the marketplace."
All of the 2,500-odd homes up for sale were already being rented when they were foreclosed, and about five-sixths are currently occupied. If the pilot is successful, Fannie Mae will begin selling homes that have yet to be converted to rentals.