The program, which has been in the works for some time, is currently at the pilot stage. Various housing units currently held by Fannie Mae will be sold in bulk to private investors as a test of the concept, to determine whether bulk sales are worth pursuing further. During this first trial, many of the properties selected are already occupied. This is because of the uncertainty involved, Burns indicated.
The same reasoning also determined that only Fannie Mae will participate for now. The government-sponsored enterprise was also selected in part because it holds properties concentrated in certain markets, such as Las Vegas, Phoenix, Chicago, Atlanta and Los Angeles. These areas, and any others the program targets in the future, are marked by both an available supply of homes and strong demand for rentals, Burns told lawmakers.
Fannie will price the homes fairly close to its ordinary practices, she indicated, and the success of this first step, among other considerations, will determine whether the program moves forward at all and what level of involvement Freddie Mac might see in the future. Property management companies may have an opportunity to work with bulk investors, given that properties are in localized clusters.