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Foreclosure Rental Plan Gaining Momentum

by UrbanTurf Staff

Foreclosure Rental Plan Gaining Momentum: Figure 1

A plan to rent out thousands of foreclosed homes is gaining steam in Washington.

Today, The Wall Street Journal reports that the Federal Housing Finance Agency will officially issue a formal “request for information” on how to turn many of the country’s foreclosed homes into rental properties. The Journal reported a few weeks ago that a plan like this was in the works, in an effort to stabilize the country’s housing market.

Here are brief details on two proposals from the Journal:

“One proposal would sell packages of hundreds or thousands of foreclosed properties in bulk to investors that agree to rent them out. Another approach would let investors enter joint ventures with Fannie or Freddie to invest in a pool of converted rental homes. A national property-management business would handle day-to-day landlord responsibilities. Investors would pay for rehabbing and maintaining properties and would share revenue from monthly rental income and the ultimate sale of the property.”

This concept could conceivably help the tight local rental market. As we reported in July, Delta Associates second quarter report showed that rents in the DC area have risen 6.3 percent over the past twelve months while vacancy rates sit at 3.1 percent, the third lowest vacancy for a major metro area in the country.

This article originally published at https://dc.urbanturf.com/articles/blog/foreclosure_rental_plan_gaining_momentum/3954

4 Comments

  1. Going Galt said at 9:13 pm on Wednesday August 10, 2011:
    Too rich, another Federal bureaucracy is exactly what we need. I can see it now; The Real Estate Administration and Leasing Division for Unsold Markets or as we will fondly call them: REALDUM. Just sell your assets off at reasonable prices and get yourself out of the business you jack a@ses!
  1. PleasantPlainer said at 9:39 pm on Wednesday August 10, 2011:
    Something tells me if it's going to change the status quo, some high powered lobbying firm representing whatever sector is benefiting from the current situation will block it.
  1. Going Galt Part Deux said at 9:55 pm on Wednesday August 10, 2011:
    And one more point... Fannie Mae is nearly bankrupt and Freddie Mac just asked the federal gov't for a loan to keep it afloat so how do they expect to keep these depreciating assets on their books if they can’t afford to hold them and then who is really paying for them? That would be us I guess. But, since the feds are nearing insolvency with our debt issues they are unlikely to be able to assure these 2 behemoths that they could keep the money flowing to them. They are trying to help the market out (which I understand and respect) but all they are doing is manipulating the market and keeping us unsure of when the other shoe will drop- and it will drop. They need to just let the open market deal with the issue and just get the pain and suffering out of the system. We will never have normalcy otherwise. Stepping off the tree stump.
  1. anon said at 8:37 pm on Wednesday August 10, 2011:
    Great. A National Property Management Company...that won't have the first clue about any of the local markets throughout the country. How about a National Company charged with identifying the best local property management companies and best local Real Estate agents so the government benefits from local market knowledge? Or just hire large regional/national Real Estate companies to manage the business. Pick the five companies that provide national reach, hire them, call it a day.

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