Senior associate director for housing and regulatory policy Meg Burns of the Federal Housing Finance Agency recently testified before lawmakers to clarify the purpose and intent of the REO-to-Rental Initiative.
Currently in pilot stages, this program is intended to facilitate the bulk sale of properties held by Fannie Mae to private investors for conversion into rental units. Sales through the program will not be discounted heavily, according to Burns, who indicated that transactions would be concluded for prices comparable to those Fannie Mae could receive through retail execution.
The program is not appropriate for or intended to operate in all areas of the country, she noted, but rather will specifically target areas that have both a large supply of single-family homes for sale and a strong demand for rental housing. The program is being run with only Fannie Mae for now due to uncertainty; government officials do not know how successful it will be and wished to limit resources and commitment for now while exploring the possibilities.
Among other goals, the project is intended to evaluate whether bulk investors can effectively work with regional and local rental property management firms and other interests to stabilize and improve market conditions.