The Obama administration is seeking ideas from investors on how to convert thousands of foreclosed properties owned by government-backed entities into rental homes.
The Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, U.S. Treasury Department and the Department of Housing and Urban Development announced the solicitation in a press release today.
The goal is to shrink the pool of foreclosed properties for sale and boost stagnant home prices by finding investors to buy large pools of foreclosed properties owned by Fannie Mae and Freddie Mac, the two government-run mortgage companies that own or guarantee about half the nation’s mortgages.
“Partnerships involving enterprise properties may reduce taxpayer losses and meet the enterprises’ responsibility to bring stability and liquidity to housing markets,” FHFA Acting Director Edward J. DeMarco said in the press release.
Freddie Mac, of McLean, Virginia, and its larger rival, Washington-based Fannie Mae, have survived on government aid since September 2008, when they were seized amid crippling losses tied to subprime loans.
The FHFA is pursuing the quest because of expectations that housing prices will continue to fall if delinquent properties end in foreclosure, rather than being converted to some type of income-producing arrangement.