The FHFA (Federal Housing Finance Agency) recently announced their new REO (Real Estate Owned) Program, which will be targeted as some of the hardest hit metro areas. You must be pre-qualified for this program in order to be able to bid on purchases in the pilot phase of the program and in future phases.
This program is going to allow the investors that have been pre-qualified to purchase foreclosed properties in bulk, with the only stipulation of the program is that you rent them for a pre-determined amount of years. This progam is being aimed at trying to stabilize some of the harder hit housing markets, as well as providing more rental units in those areas as well.
The REO Initiative was developed by the Treasury Department, Department of Housing and Urban Development, Federal Deposit Insurance Corporation, Federal Reserve, Fannie Mae and Freddie Mac. After floating the idea last summer, operators reviewed more than 4,000 responses to a Request for Information (RFI) to create the pilot program for REOs owned by Fannie Mae, Freddie Mac and the Federal Housing Administration.
In the initial or pilot phase, Fannie Mae will offer these pools for sale, where the assets will include rental properties, vacant properties, and some non-performing loans. This program is set to be launched in the near term.
To pre-qualify, an investor must:
• have the financial wherewithal to acquire the assets
• possess sufficient experience and knowledge in financial and business matters to analyze and bear the risks of the investment opportunity
• agree to keep certain information about the REO and related matters confidential.
Interested investors can register at FHFA’s REO Initiative page to pre-qualify.
In many cases, these loans will need to close in a short period of time. Hard Money will be one option to get these funded in a short timeframe. NLDS Corp will be providing financing for these FHFA REO pools for packages in some of the major markets in the country.