The REO pilot transaction provided a proof-of concept and model for future structured sales that may be used by the Enterprises or private institutions.įHFA Announces Next Steps in REO Pilot Program (JRelease) FHFA Announces First Winning Bidder in REO Pilot Initiative (SeptemRelease) FHFA Announces Winning Investor in Chicago REO Pilot Initiative (OctoRelease) FHFA Statement on REO Pilot Transactions(NovemStatement) Highlights of the REO Pilot Transactions (November 29, 2012) Winning bidders acquired seven subpools offered for sale.
Replicability -Assess whether the model can be efficiently replicated to make it a worthwhile addition to the standard retail and small-bulk sales strategies in place at Fannie Mae and Freddie Mac and other financial institutions with large inventories of properties to sell. Private Capital -Gauge investor interest in a new asset class, scattered-site single-family rental housing, as measured by the price investors are willing to pay for a traditionally high-value commodity hampered by oversupply.Įconomies of Scale -Determine whether the disposition of properties in bulk, instead of one-by-one, presents an opportunity for well-capitalized investors to partner with regional and local property management companies and other community-based organizations to create appropriate economies of scale and lead to civic-minded approaches that could stabilize and improve market conditions. The goals of this pilot, the REO to Rental Initiative, were to determine if a bulk sale model concept would generate private investment in single-family rental housing efficiently and effectively to stabilize local markets.įHFA’s objectives were to understand the market for these assets across three dimensions: In late February 2012, FHFA announced the REO-to-Rental Pilot Initiative Targeted to Hardest-Hit Areas), a highly targeted pilot program with Fannie Mae, to test an asset disposition model that could complement the existing disposition strategies for REO by Fannie Mae and Freddie Mac. Pre-qualification ensures investors will have the financial capacity and operational expertise to manage properties in a way that is conducive to the stabilization of communities hard hit by the housing downturn.
This rental period could provide relief for local housing markets that continue to be depressed by the volume of foreclosed properties, and provide additional rental options to certain markets. The REO Initiative allows qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years. The Fannie Mae’s and Freddie Mac's REO portfolios are now stable and their individual retail sales are achieving close to fair market values for the properties. FHFA is exploring new approaches to the disposition of foreclosed properties (real estate owned, or REO) owned by Fannie Mae and Freddie Mac.
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