White House Seeks Investors to Convert Foreclosed Houses to Rental Properties
If you have followed my Rental Nation series blogs on US residential market (Rental Nation, Rental Nation – Wall Street Journal Perspective, Rental Nation – Liability Management), you definitely don’t want to miss this news. Today (8/9), the Federal Housing Finance Agency (FHFA), in consultation with the U.S. Department of the Treasury and Department of Housing and Urban Development (HUD), has announced a Request For Information (RFI), seeking input on new options for selling single-family real estate owned (REO) properties held by Fannie Mae and Freddie Mac (the Enterprises), and the Federal Housing Administration (FHA).
The purpose of this initiative is very straightforward. According to Treasury Secretary Tim Geithner, “Exploring new options for selling these foreclosed properties will help expand access to affordable rental housing, promote private investment in local housing markets, and support neighborhood and home price stability.”
“FHFA, Treasury and HUD anticipate respondents may best address these objectives through REO to rental structures, but respondents are encouraged to propose strategies they believe best accomplish the RFI’s objectives. Proposed strategies, transactions, and venture structures may also include:
- programs for previous homeowners to rent properties or for current renters to become owners (“lease-to-own”);
- strategies through which REO assets could be used to support markets with a strong demand for rental units and a substantial volume of REO;
- a mechanism for private owners of REO inventory to eventually participate in the transactions;
- and support for affordable housing.”
I believe that it will be a win-win solution. For government, this option could help stabilize the housing market. At the same time, more rental properties can be available to meet the increasing demand of residential properties. For investors, like I mentioned, this is a good opportunity to seek stable return. In addition to that, in my opinion, it is reasonable to expect Federal government to provide certain incentives to encourage private investors to join in the efforts. The original announcement (pdf file can be found at the link below).
Where is my pension 