The Federal Housing Finance Agency (FHFA) has begun the first pilot transaction of its program to turn foreclosed Fannie Mae and Freddie Mac homes into rental properties, according to HousingWire. At the outset of the Real Estate-Owned Inititative, the FHFA will take bids on almost 2,500 properties in Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and Florida.
Potential, prequalified investors must undergo an application process to prove they are qualified; criteria include financial capacity, experience and specific purchasing plans. Under the terms of the program, owners will have to hold on to the property and rent it out for a set number of years.
The FHFA hopes the program will clear some of the national backlog of foreclosed homes, getting them back out on the market. An REO-bulk sales initiative was first mentioned back in August as a way to help housing market recovery in some of the hardest hit areas of the country; the agency announced the first pilot program in December.
The initiative is also expected to create nearly 2 million construction and real estate jobs in the target areas, which would be funded through private capital.
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