Mar
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Foreclosed Chicago Real Estate Being Sold in Federal Program

March 01, 2012

Since the housing bubble burst, the Chicago real estate market has been one of the hardest hit metropolitan areas.

As a result, the Windy City is involved in a pilot program aimed at lowering the amount of foreclosed properties, and that pilot program has entered its second phase.

home with a bank owned sign in frontThe Federal Housing Finance Agency’s (FHFA) Real-Estate Owned (REO) Initiative allows qualified investors to purchase foreclosed properties in the country’s hardest-hit areas with the requirement to rent the properties for a certain number of years.

That would lower the volume of distressed properties while creating additional rental options in markets that need it most.

The program, which was developed in conjunction with the Treasury Department, Department of Housing and Urban Development, Federal Deposit Insurance Corporation, Federal Reserve, Fannie Mae and Freddie Mac, is being implemented in Chicago, Atlanta, Las Vegas, Los Angeles, Phoenix and parts of Florida.

“We believe that this initiative holds promise for providing support to local neighborhoods that were especially hard hit by the housing crisis and will help meet the rising demand for rental housing in many communities,” said Michael Stegman, Counselor to the Secretary of the Treasury for Housing Finance Policy.

Unveiled at the beginning of February, the first step involved investors getting prequalified for the program. Now, the FHFA has announced the first pilot transaction under the program, which involves approximately 2,854 units in about 2,490 Fannie Mae foreclosed properties. That includes about 120 units in 99 Chicago properties.

Investors who have been prequalified and who submit a security deposit and sign a confidentiality agreement will gain access to information about those properties so they can enter bids.

“This is another important milestone in our initiative designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties, and reduce the supply of REO properties in the marketplace,” said FHFA Acting Director Edward J. DeMarco.

If you are an interested investor who has yet to prequalify, it is not too late. Click here to get a Bidder Qualification Application.

For more information on the program, visit fhfa.gov.

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Tracey

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