How Many Chicago Homes Are Part of Fannie Mae's New Foreclosure to Rental Program?
The short answer to the above question: 99 properties. How many units are in those 99 properties? 120. How many of those units are vacant? 34.
On Monday, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae would begin sending detailed information about foreclosed properties that are available to qualified investors. These properties are part of a pilot program designed to convert empty, foreclosed properties into rental properties. Investors are expected to buy large bundles of property at once. They acquire the properties for a reasonable price and agree to rent those properties out for a period of years.
Does 120 units, only 34 of which are currently vacant sound like much? Not really. At the same time, this is a pilot program -- it is designed to determine whether a broader program would work. Fannie Mae released some data related to the 2,490 properties that are part of the pilot program. You can find that data here.
On the other hand, getting 99 properties out of the hands of Fannie Mae and into the hands of a responsible investor committed to maintaining and renting out the properties could have a beneficial effect on the neighborhoods where those properties are located. In some of the harder-hit neighborhoods, 20-30 buildings could help stabilize several blocks.
While only time can reveal whether this pilot program will be successful, it does little to address homes that have yet to enter the foreclosure market. Clearing properties from the current inventory is great, but prices cannot truly stabilize until we can get some of the 6 million delinquent mortgages back on track. We must also address the vast number of underwater homes because they create a heightened risk of default, which would add more homes into the foreclosure pipeline, further putting property values at risk.