US Housing Regulator Launches Foreclosure-Rental Program
Last update: 2/1/2012 9:41:34 AM
By Alan Zibel
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--A U.S. housing regulator on Wednesday invited investors to submit initial applications so they can qualify to bid for pools of foreclosed properties owned by Fannie Mae (FNMA) and Freddie Mac (FMCC).
The announcement by the Federal Housing Finance Agency, which regulates the two government-controlled mortgage-finance giants, represents an effort to aid the troubled U.S. housing market by allowing investors to purchase foreclosures and turn them into rental properties. It comes as President Barack Obama announces a series of steps on Wednesday to assist the housing market.
The FHFA said it wants to make sure investors in such properties have strong enough finances and enough experience to manage such a process.
Investors would be required to rent out the foreclosures for several years. The regulator did not disclose how many properties would likely be sold off through the program.
"This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities," the agency's acting director, Edward DeMarco, said in an statement.
FHFA did not disclose how many properties would be sold, but said it would soon announce the first transaction in a pilot program being run by Fannie Mae, which will sell rental properties, vacant homes and defaulted loans.
Regulators selected Fannie Mae to run the pilot program rather than Freddie Mac because it has a larger inventory of foreclosures.
-By Alan Zibel, Dow Jones Newswires; 202-862-9263; alan.zibel@dowjones.com
(END) Dow Jones Newswires
