WASHINGTON, DC

- In an effort to reduce the inventory of foreclosed properties held by Fannie Mae and Freddie Mac, the Obama administration is seeking new ideas on how to convert its inventory of homes into rental property.

In a released statement from the Federal Housing Agency, the Department of Treasury and the Department of Housing and Urban Development, the agencies said the administration would explore alternatives for pairing public and private investments in the housing market to “maximize value for tax payers and to support rental and affordable housing.”

“As we continue moving forward on housing finance reform, it’s critical that we support the process of repair and recover in the housing market,” said Treasury Secretary Tim Geithner in the statement. “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.”

The Federal Housing Administration, Fannie Mae and Freddie Mac own large numbers of real-estate owned (REO) properties, more than 200,000. And it is being widely reported that according to Barclays Capital, approximately 830,000 REO properties are currently in the foreclosure process.

Options that the administration would consider include investors buying foreclosed properties and using them as rentals, as well as joint ventures in which investors would partner with Fannie Mae and Freddie Mac and buy into a pool of rental properties that would be managed by a private partner.

Responses to the Request for Information can be submitted to REO.RFI@fhfa.gov – the deadline is Sept. 15.

Ideas sought to reduce foreclosed homes inventory
Photo courtesy of HUD.

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