Fannie Mae will allow homeowners facing foreclosure to stay in their homes and rent them for as long as a year, as part of the government's latest effort to help troubled borrowers, while keeping more foreclosed properties from hitting the housing market.
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.
Fannie Mae wouldn't say in its Thursday announcement how many homeowners it expects would take advantage of the program. The company acquired 57,000 properties through foreclosure during the first half of the year.
The article notes that Freddie Mac began offering month-to-month leases to some foreclosed homeowners in February and may step up to a program similar to Fannie Mae's. Question: did it take this long for the idea to catch on, or did it take this long for the housing market to change to a point where Fannie Mae thought this would now be a good idea?