FHFA initiates REO bulk sale program

The Federal Housing Finance Agency has launched its long-discussed effort to sell government-held housing to private investors, beginning with a pool of 2,490 properties of various types.

The first group includes 36 three-unit buildings, 58 four-unit buildings, 118 duplexes, 527 condos and 1,743 single-family homes, with a few manufactured homes and a single co-op. Of the total, 2,849 units are located in Atlanta, Chicago, Florida, Las Vegas, Los Angeles and Phoenix.

Considered some of the hardest-hit markets in the housing crisis, these areas may have more residents interested in renting than buying at the moment, many experts assert. Proponents of this initiative believe that it will help move properties from government to private hands more quickly and potentially help to fill vacancies while meeting demand for rental housing in certain markets.

Investors typically are slowed down by the process, according to National Real Estate Investor, which has limited interest and opportunity in converting properties to rentals. The bulk REO program is meant to clear obstructions, encouraging investor involvement and allowing the transition to be made more quickly. Newly interested or participating owners may need to find rental managers prepared to handle their properties.