by Broderick Perkins
(2/10/2012) Erate Exclusive - A more organized modern-day version of late 19th Century land rushes in America is underway with properties already occupying the land.
The Federal Housing Finance Administration (FHFA) has opened for business a new program to unload of an estimated 200,000 Fannie Mae- and Freddie Mac-owned homes, beginning with an investor prequalification process.
Targeting hardest hit metropolitan areas, FHFA's "Real Estate Owned (REO) Initiative (ROI)" allows qualified investors to purchase pools of foreclosed properties, provided they convert them to rentals for a set number of years or help facilitate flips to owner-occupiers.
The unprecedented, long-planned, ROI program is designed to shrink the inventories of distressed properties that are dragging down home prices; reduce Fannie Mae's and Freddie Mac's carrying costs; rehabilitate distressed properties; provide affordable housing for markets most in need and help stabilize hard-hit communities weighed down by foreclosures that represent as much as 50 percent of the housing stock.
Investors, who are often better at moving distressed properties than banks, have an opportunity to realize a sizable return on their investment.
The prequalification period is designed to ensure investors will have the financial wherewithal and operational expertise to manage properties in a way that is most conducive to shoring up hard hit communities.
"This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities," said FHFA acting director Edward J. DeMarco.
"I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative," he added.
Investors can range from individuals who earn more than $200,000 to multi-million and multi-billion dollar individuals, partnerships, non-profits, banks, trusts and corporations, provided they qualify.
FHFA is also looking for ways to improve REO sales, at market value, to homeowners and small investors. ROI wants to see programs developed for previous homeowners to rent properties or for current renters to become owners under lease-to-own deals.
Prequalification requires investors meet certain minimum criteria including
• Financial ability to acquire and manage the assets.
• Sufficient experience and knowledge in the financial and business matters and risks associated with investment properties.
• Agreement to keep certain information about the REO and related matters confidential.Refinance at Today's Low Rates!
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