In an effort to reduce community blight and vandalism damage to vacant properties, as well as maintain property values, Freddie Mac released an allowable for clear boarding in a recent bulletin.
“Clear boarding provides another option for securing properties and protecting our neighborhoods,” said Caroline Reaves, CEO of Mortgage Contracting Services. “All available alternatives (such as traditional window replacement and steel) should be considered when determining what is the best option for each property.”
Freddie Mac will reimburse servicers for use of clear boarding up to $2.25 per united inch, with a maximum amount of $2,000. According to Freddie Mac, in order to qualify, the clear boarding must be made of polycarbonate material or at least the same strength, at least 3/16” thick, and properly installed.
The GSE will update their Reimbursement System in the future to reflect a clear boarding expense code and the maximum reimbursement amount. Until the system is updated, servicers must submit an expense code 090030 and a request for pre-approval via the RPA functionality for reimbursement of costs in excess of $900 in order to receive reimbursement.
Previously, Fannie Mae had released an allowable for clear boarding as well. The GSE no longer allows plywood to be used on the windows of properties in preforeclosure, however, this rule does not apply to Fannie Mae’s REO properties. As of March 29, servicers have 90 days to re-glaze/repair or clear board all unsecured and previously plywood boarded windows. Additionally, Fannie Mae will allow servicers seven days to secure a property after it has been found vacant, by re-glazing/repairing or clear boarding.
“I think this is a trend in the right direction,” said Robert Klein, Founder and Chairman of Safeguard Properties and Founder and CEO of Community Blight Solutions. “We’re dealing with the actual issue of community blight, and Fannie Mae and Freddie Mac both realized that the plywood boarding is not the right solution for securing the property and for community blight in general for communities across the country.”