First Round of Pilot Rental Initiative Completed with 2,500 Homes Sold

The first round of winners has beenrnselected to purchase foreclosed real estate from Freddie Mac and FanniernMae.  The Federal Housing Finance Agencyrn(FHFA) announced today that 2,500 single family homes had been awarded to successfulrnbidders under a pilot initiative to convert real estate acquired by the tworngovernment sponsored enterprises (GSE) through foreclosure into rental property.  </p

Successful candidates for purchasing propertiesrnfrom the GSE’s real estate portfolio (REO) had undergone several steps in arnqualification process before being permitted to bid on the houses which they hadrnto agree to hold and rent for a period of time before reselling.  </p

The properties were offered in salernpools which were geographically concentrated in various locations across thernUnited States.  The GSEs, FHFA and other federalrnagencies involved, Departments of Treasury, Housing and Urban Development,rnFederal Deposit Insurance Corporation and the Federal Reserve, had severalrngoals for the program.  They hoped tornrelieve the GSEs of the costs and administrative burdens of managing thousandsrnof foreclosed properties, alleviate the blight imposed on communities by largernnumber of vacant and possibly deteriorating properties, increase the rentalrnstock, while at the same time not flooding the market with distressedrnproperties. </p

 FHFA described the response to the pilotrninitiative as “robust with strong qualified bidder interest.”  Some 4,000 responses were received to therninitial “Request for Information” issued by the program sponsors last February,rnhowever beyond announcing that the awards had been made FHFA released norninformation on the names or even the numbers of successful bidders.</p

“FHFArnundertook this initiative to help stabilize communities and home values inrnareas hard-hit by the foreclosure crisis,” said Edward J. DeMarco, ActingrnDirector of FHFA. “As conservator of Fannie Mae and Freddie Mac, we believernthis pilot program will assist us in achieving our objectives and help tornmaximize the benefit to taxpayers. We are pleased with the response from thernmarket and look forward to closing transactions in the near future.”

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