The Federal Housing Finance Agency (FHFA) has announced the first pilot transaction under its Real Estate-Owned (REO) Initiative, targeting metropolitan areas in Atlanta, Chicago, Las Vegas, Los Angeles and Phoenix as well as parts of Florida.
Under the REO Initiative, 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. 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 to determine if they are qualified to bid.
‘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,’ says FHFA Acting Director Edward J. DeMarco.