Freddie Mac will allow some mortgage borrowers to rent out their homes they lost to foreclosure. Freddie Mac wants to prevent foreclosed properties from becoming vacant so they won't fall into disrepair and be vandalized. Foreclosed properties also reduce property values and cause an increase in crime.
Freddie Mac will also allow renters to remain in their homes even if their landlord's property will be foreclosed. There are approximately 8,500 properties that have begun the foreclosure process but many of these properties are vacant. Renting out the property will help the housing market recover at a faster rate.
There are some guidelines that homeowners must follow under the Freddie Mac program. Former homeowners and tenants have to demonstrate they have enough income to pay the rental fee. Freddie Mac is also considering reinstating mortgages for borrowers who can qualify for a modified loan.
Freddie Mac recently announced it will stop all foreclosure sales involving occupied single family and 2 - 4 unit properties with Freddie Mac owned mortgages through March 6, 2009. The suspension however does not apply to vacant properties.
Fannie Mae is offering a similar plan and boasts that it has prevented the sale of 20,000 foreclosures and stopped the eviction of 6,300 homeowners and renters this winter season.
Fannie Mae also announced it will stop all foreclosure sales and evictions of occupied properties through March 6 in anticipation of the Obama Administration's national foreclosure prevention and loan modification program. For more information visit the Fannie Mae and Freddie Mac websites.
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