Cabinet shops and woodworkers could find work remodeling foreclosed homes for rental housing, as the Federal Housing Finance Agency begins selling Fannie Mae-held homes.
Last week 2,490 homes repossessed by Fanni Mae in six hard-hit cities were put on sale to investors, who would buy then convert the homes into rentals.
The Federal Housing Finance Agency is running a pilot transaction under what it calls the Real Estate-Owned Initiative Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of Florida (click for the complete list).
Prequalified investors can submit applications to demonstrate their ability to purchase and convert pools of Fannie Mae foreclosed properties, with the requirement they rent the properties for a set number of years.
The effort is "designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties, and reduce the supply of REO (real estate-owned) properties in the marketplace,” said FHFA Acting Director Edward J. DeMarco in announcing the program.
This effort comes as pending home sales contracts reached a two-year high, and the oversupply of new and and resale homes has been in decline. Repossessions continue to flow into the market, depressing new building and home prices in general, though Case-Shiller Index creator Robert Shiller (left) speculates in a video on whether we are approaching the bottom on housing prices.
Other recent federal moves to address the home foreclosure crisis include reduction of refinancing fees on FHA-backed mortages, which could cut $1,000 annually from payments by as many as 3 million homes refinanced before June 1, 2009; and a review of foreclosures on military personel since 2006. Foreclosures on homes of active duty service personnel were banned by the federal government.
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