The next step is being taken in a plan to convert repossessed residential real estate into rental properties.
In August of last year, a joint announcement from the Department of Housing and Urban Development, the Department of the Treasury and the Federal Housing Finance Agency outlined a proposal to use repossessed homes as rental properties.
Earlier this month, FHFA said that investors were being pre-qualified to bid on Fannie Mae’s real-estate-owned assets. The asset pools included rental properties, vacant properties and non-performing loans.
On Monday, FHFA said it is taking the next step in the process by allowing pre-qualified investors to submit applications demonstrating their financial capacity, experience and plans to purchase pools of distressed Fannie assets. The pools include around 2,490 properties.
The pilot program is targeting the hardest-hit metropolitan areas, with nearly 30 percent of the assets secured by Florida properties, almost a quarter secured by homes in Southern California and 21 percent backed by Atlanta residences.
Details about the sales are being sent to pre-qualified investors, who will be required to post a security deposit and sign a confidentiality agreement.
“At that stage, interested investors must submit a comprehensive application, which will be reviewed by an outside firm,” the regulator said. “Only investors who are qualified through this rigorous process will be eligible to bid.”
Once an acquisition is made, investors will be required to rent out the properties for a minimum number of years.
Bidding is expected to soon start on distressed assets owned by the Federal Housing Administration and Freddie Mac.
Investors can read more about pre-qualifying at www.FHFA.gov.
REO-to-Rental Program Takes Shape
The much-anticipated program that will convert real-estate-owned properties into rentals is now underway.