Government officials are in the process of reviewing 4,000-plus recommendations for turning repossessed homes into rental properties in order to trim the REO inventory held by federal housing agencies.[IMAGE]
The ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA) has said it is pursuing potential ideas for REO-to-rental pilot programs ""with a sense of urgency,"" but two California firms don't plan to wait on the government's involvement to get a large-scale REO rental venture off the ground.
""Carrington Holding Company LLC"":http://www.carringtonhc.com announced Wednesday that it has entered into an agreement with certain investment funds managed by ""Oaktree Capital Management, L.P."":http://www.oaktreecapital.com that will fund an initial purchase of up to $450 million in distressed single-family homes across the country.[COLUMN_BREAK]
""We believe that re-deploying vacant REO properties into rental homes is a way to help revitalize the housing market,"" said Bruce Rose, Carrington's founder and CEO.
Rose contends that reducing the number of distressed properties for sale will stabilize home prices and help neighborhoods that have been damaged by foreclosures begin the restoration process.
The bank-owned homes purchased through the venture will be managed as rental properties by Carrington. The company notes that there is growing market demand for rental units Ã¢â‚¬" demand that can be met through the industry's effort to remove distressed properties from the sales inventory and stabilize the housing market.
Carrington currently manages over 3,000 single-family rental homes under Fannie Mae's Tenant-in-Place and Deed-for-Lease programs. The company has developed a national field services network along with a proprietary software system that allows for centralized property monitoring and management.
""Carrington's REO rental program is an excellent fit for our investment strategy, which includes a broad range of debt and equity investments in real estate-related investments and restructurings,"" said John Brady, Oaktree's head of global real estate.
""We believe that this is not only a unique investment opportunity with few qualified large-scale competitors, but one that also has the potential to have a broader positive effect on the housing market and the overall economy,"" Brady added.