The Federal Housing Finance Agency (FHFA) has debuted the first step of a real estate owned (REO) initiative targeted toward hardest-hit metropolitan areas. Under this endeavor, investors interested in participating may ‘pre-qualify’ to establish eligibility to bid on transactions in the initial pilot phase as well as subsequent phases.
According to the FHFA, the REO initiative will allow qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years. This rental period could provide relief for local housing markets that continue to be depressed by the volume of foreclosed properties, as well as provide additional rental options to certain markets. Pre-qualification ensures investors will have the financial capacity and operational expertise to manage properties in a way that is conducive to the stabilization of communities hard hit by the housing downturn.
During the pilot phase, Fannie Mae will offer sale pools of various types of assets including rental properties, vacant properties and nonperforming loans with a focus on the hardest-hit areas.
The REO initiative was first announced in August 2011 and was developed in conjunction with the U.S. Department of the Treasury, the U.S. Department of Housing and Urban Development, the Federal Deposit Insurance Corp., the Federal Reserve, Fannie Mae and Freddie Mac.