Matt Martin, CEO of Matt Martin Real Estate Management, is eagerly awaiting the introduction of a program that the Obama administration hopes will transform foreclosed properties into rehabilitated rental units and kick-start the economy.
He says he’s not alone. “There is a large chunk of capital, billions of dollars, sitting on the sidelines waiting to see what kind of program the government comes up with,” Martin said.
At issue is a Federal Housing Finance Agency push to develop a program that is expected to use government financing or guarantees to attract investors to buy up big regional or national pools of foreclosed properties currently owned by government seized housing giants Fannie Mae and Freddie Mac. The plan would be to convert these properties into rentals, a market that has strengthened recently. See story from August on foreclosure-to-rental program
Some analysts say President Barack Obama may discuss the initiative at his State of the Union Tuesday, with a focus on how to convert empty homes into productive engines of the economy. Read State of Union preview.
So far, the FHFA has received over 4,000 comments on how it should go about developing the program from a wide variety of groups including Martin and investors such as Fortress Investment Group FIG -1.10% , Chelsea Investment Corp. and the Association of Mortgage Investors.
The FHFA noted that most respondents suggested strategies that involved renting properties for some time. The agency added that many respondents “demonstrated their technical and financial capability to engage in large-scale transactions” with Fannie, Freddie and FHA.
The number of foreclosed properties is big and growing. Fannie Mae, Freddie Mac as well as the Federal Housing Administration currently have about 200,000 foreclosed properties on their books. However, Bank of America Merrill Lynch predicts that Fannie, Freddie and FHA will need to sell 3.4 million foreclosed properties in the future. Banks also have thousands of foreclosures on their books, and regulators are seeking to ease efforts to rent those out.
Read more...Investors eagerly eye U.S. foreclosure rental plan via MarketWatch