Freddie Mac has officially launched its real estate owned (REO) property rental initiative that the government-sponsored enterprise intimated in January would be forthcoming.
The REO Rental Initiative gives qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. HomeSteps, Freddie Mac's real estate unit, will manage the initiative, which will be implemented through several national property management firms.
Freddie Mac also announced it will continue to suspend all eviction actions until April 1 to ensure there is ample time for current occupants to learn about the options available to them under the new initiative.
‘Freddie Mac's REO Rental Initiative can help ease a foreclosure's impact by giving renters and former owners more time to determine what options are best for them and their families," says Ingrid Beckles, senior vice president of default asset management at Freddie Mac. "At the same time, the REO Rental Initiative helps stabilize property values and local communities by keeping homes occupied and less vulnerable to vandalism."
Property management firms have begun the process of contacting occupants of foreclosed properties to determine their interest in staying in the home and their eligibility for a month-to-month lease. Occupants will be contacted only after the foreclosure gives Freddie Mac the legal authority to offer a lease.
To qualify for a lease, the tenant or former owner must occupy the property and show they have adequate income to pay the monthly rental amount established by the property management company based on market rents for the area in which the home is located. Occupants must agree to allow HomeSteps to show the home to potential buyers, as it will be marketed for sale during the lease period.
If an occupant does not wish to lease the property, Freddie Mac will continue its current practice of offering relocation assistance.
SOURCE: Freddie Mac