Fannie Mae Gets Into Short-Term Rental Business

Fannie Mae, the public-private mortgage giant bailed out by the U.S. government in 2008, is going into the short-term rental business.

Fannie Mae has unveiled a new National REO Rental Policy that now permits renters - regardless of credit score or payment history - to lease homes that have been repossessed by the mortgage giant.

"Overwhelmed with thousands of bank-owned properties in places such as South Florida, Las Vegas, and San Diego, Fannie Mae is obviously desperate to stabilize its portfolio of repossessed residences and reduce the monthly expenses," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "Lenders, governments, and neighborhoods are quickly realizing how important it is to have someone living in a foreclosed home even if it means providing extremely generous terms for the renter."

All of the leases on the Real Estate Owned (REO) properties will be on a month-to-month basis with the rental rates priced at a fair market value for the area. No security deposit will be required, according to Fannie Mae.

Fannie Mae's rental program is open to tenants who were already living in a home prior to the residence being repossessed.

In return, all of tenants will be expected to cooperate with the listing agents who will be showing the properties to potential buyers. When a property is sold, the terms of the tenant's lease must be honored by the new owner.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter's blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database^TM .

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