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Real estate industry

FHFA and Treasury Seek Input on New Options for Selling Foreclosed Properties

Strategic Insights

— 1 min read

The Federal Housing Finance Agency (FHFA), in consultation with the U.S. Department of the Treasury and Department of Housing and Urban Development (HUD), has announced a Request For Information (RFI) to explore alternative options for selling single-family real estate owned (REO) properties held by Fannie Mae and Freddie Mac (the Enterprises), and the Federal Housing Administration (FHA). The RFI aims to help address current and future REO inventory, while also maximizing value to taxpayers and increasing private investment in the housing market. The agencies are seeking input on possible pooling of REO properties, partnerships involving Enterprise properties, and approaches that support rental and affordable housing needs.

Key Takeaways:

  • The FHFA is seeking input on new options for selling REO properties held by Fannie Mae, Freddie Mac, and the FHA, with the goal of reducing the REO portfolios of the Enterprises and FHA in a cost-effective manner.
  • The RFI aims to reduce average loan loss severities to the Enterprises and FHA relative to individual distressed property sales, and to address property repair and rehabilitation needs.
  • FHFA, Treasury, and HUD anticipate respondents may best address these objectives through REO to rental structures, but are encouraging respondents to propose strategies they believe best accomplish the RFI's objectives.
  • Proposed strategies may include programs for previous homeowners to rent properties or for current renters to become owners, as well as mechanisms for private owners of REO inventory to participate in the transactions.
  • The RFI also seeks to support affordable housing, with the goal of finding and promoting new ways to alleviate the strain on the affordable rental market.

Statistics:

  • Millions of families nationwide have seen their home values impacted as their neighbors' homes fall into foreclosure or become abandoned.
  • Half of all renters spend more than a third of their income on housing, and a quarter spend more than half.
  • FHFA, Treasury, and HUD are seeking proposals that can help stabilize neighborhoods and home values at a critical time for the economy.

Sources:

  • Department of the Treasury
  • Federal Housing Finance Agency (FHFA)
  • U.S. Department of Housing and Urban Development (HUD)

*

  • "FHFA Announces Request For Information on Options for Selling REO Properties," published on the FHFA website.

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