The federal program to sell distressed housing in bulk to investors to be converted into rentals has been met with "robust" demand, according to the Federal Housing Finance Agency (FHFA).

The FHFA recently indicated that it has informed winning bidders involved in the pilot program. They will be identified when transactions close, expected to occur sometime during the third quarter of this year. Officials remain hopeful that this move will help speed the clearing of excess inventory on the market, helping to stabilize housing availability and pricing in areas that have been affected during recent years.

Before choosing between bidders, the FHFA assessed them based on their financial strength, experience and capabilities in rental property management and other relevant areas. The properties being sold are from the stock currently held by government-sponsored enterprises Fannie Mae and Freddie Mac. It remains unclear whether the program will be continued or expanded now that winning bidders have been selected for the pilot.

The housing market is already experiencing noteworthy local recoveries in some areas, with rising construction activity to match. In particular, Axiometrics reported significant construction activity in the areas surrounding Seattle, the District of Columbia, Houston, San Jose, Dallas, New York, San Francisco and Baltimore.