The Obama Administration on Aug. 10 issued a Request for Information (RFI) seeking private-sector solutions on to help dispose of the current and future single-family real estate owned (REO) inventory of Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). As of July 1, the federal government owned approximately 250,000 houses. The RFI asks for comments on possible sales, joint ventures or other strategies.
The Administration is not seeking large-scale solutions, but rather hopes to pool properties geographically and put them under the management of a third party, a joint venture or some other structure that can respond to local market conditions.
Notably, the RFI explicitly says that where feasible and appropriate, these REO properties could be converted to rental housing. The most likely scenarios involve allowing investors and non-profits to purchase bulk properties if they agree to rent them out for some period of time.
Another option would see investors entering into joint ventures with the GSEs to invest in a pool of foreclosed houses. Investors and the government would split rehab costs and rental revenues and the proceeds from eventual sales. Property management would be outsourced to one or more private firms.
Because the Administration did not ask for comments on a specific program but simply solicited ideas from a wide range of market participants, NAA/NMHC did not submit comments but encouraged members interested in this as a possible business venture to submit comments directly by the Sept. 15 deadline.
NAA/NMHC will continue to monitor this issue closely. To help inform proposals, HUD has created a Web-based mapping tool (
http://1.usa.gov/mWLCCe ) to display the location of all foreclosed properties owned by Fannie Mae, Freddie Mac and FHA.
Members with questions or comments regarding this proposal should contact NAA’s Vice President of Government Affairs
Greg Brown.