Earlier in the year, the Federal Housing Finance Agency announced that it planned to auction off real-estate owned properties to investors in bulk. To ensure these buyers are adhering to the initiative, the FHA now says it will closely monitor what happens to these homes after transactions are completed.
At the end of March, there were more than 173,000 REO homes in the inventories of Fannie Mae and Freddie Mac. Under the program, 2,500 of these properties will be sold to investors in Atlanta, Chicago, Las Vegas, Los Angeles and Phoenix.
"What we've said throughout is that the first transaction will teach us something," said FHFA senior associate director of housing policy Meg Burns. "We'll look at what kind of restrictions we're using, what pool sizes make sense, what markets make sense. Everything is up for grabs in the next transaction. All of the factors are up for discussion."
However, some critics already say that the cost of the program outweighs the benefits. Because investors are supposed to fix up these properties and resell or convert them into affordable rental homes, monitoring the status of these 2,500 individual homes will be expensive, Guggenheim Partners policy analyst Jaret Seiberg told HousingWire.