New Fannie Mae Policy Lets Qualified Renters in Foreclosed Properties Stay in their Homes

January 15, 2009

On January 13, 2009, Fannie Mae announced a new policy that lets qualified renters in Fannie Mae-owned foreclosed properties stay in their homes.

(Fannie Mae has suspended evictions in these properties until the end of January 2009, which should allow time to implement the new policy.)

“Renters in foreclosed properties have often been a casualty of the
foreclosure crisis the country is facing,” said Michael Williams, chief
operating officer of Fannie Mae. “This policy will allow qualified
renters to remain in Fannie Mae-owned properties should they choose to
do so, mitigate the disruption of personal lives that foreclosures can
cause, and help bring a measure of stability to communities impacted by
high foreclosure rates.”

The new policy applies to:

Renters
In properties foreclosed by Fannie Mae
Who lived in the properties at the time of foreclosure.
Former homeowners (people who held the foreclosed mortgage, also called “mortgagors”) do NOT qualify for this program. The party is for third-party tenants who rented from the foreclosed homeowners.
Two-to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing all qualify.

Lease terms, security deposits, rental rates

Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property.
The company will not require renters to pay security deposits to qualify for the program.
Renters in the foreclosed properties will be asked to pay market rate rent under the new leases.
Rates will also be subject to any legal rent control restrictions.

Property condition and management

The properties must meet state laws and local code requirements for a rental property.
While the company markets the properties for sale, Fannie Mae will manage the properties through a real estate broker or a property management company.

How do I know if my home is a “Fannie Mae-owned foreclosed property”?

Property managers are contacting renters in Fannie Mae-owned foreclosed properties to notify them of their options.
If you are a homeowner, you should contact your lender to find out if you have a loan that is owned or backed by Fannie Mae.

For more information, please review the policy FAQs at fanniemae.com.

[This post was excerpted from a Fannie Mae press release.]