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Fannie Mae Rental Program: Rent Your Own Foreclosed Home?
By Jon Shanks
Nov 6, 2009
A Fannie Mae rental program will allow one-time homeowners that have allowed their house to go into foreclosure to actually rent the very same house back at "market value" in something called a "Deed for Lease" program. Taxpayer cost is not yet clear.
Fannie Mae execs believe it is a good solution to the thousands of bad loans littering neighborhoods and causing blight as homes sit vacant and begin to deteriorate.
The Wall Street Journal reports: "The "Deed for Lease" Program lets borrowers who don't qualify for loan modifications transfer their property to Fannie Mae in exchange for a lease. Borrowers-turned-tenants will pay market rents, which in most cases are lower than the cost of mortgage payments, and might be offered extensions when their leases expire."
The program helps "eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities," Jay Ryan, a Fannie Mae vice president, said in a statement.
AOL News notes, "Fannie Mae's sibling company, Freddie Mac , launched a similar effort in March. That policy, however, requires the foreclosure to be completed and only allows month-to-month leases."
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