Investor demand expressed through bids in the federal program to sell real estate-owned properties for conversion into rentals has been “robust,” according to officials.
The winning bidders for the pilot program have been selected, according to the Federal Housing Finance Agency (FHFA), and bulk sales of the first foreclosed properties should be completed during the third quarter of this year. The identities of the winning bidders will be released publicly at that time, officials indicated. Supporters of the program continue to hope that it will prove helpful in reducing housing inventory sitting unused and meeting the demand for rental housing.
Demand has grown notably in a number of markets as many Americans seek rental housing, enough to lead to spikes in construction in certain areas. Axiometrics notes that multifamily construction is particularly high in the areas around Baltimore Dallas, the District of Columbia, Houston, San Francisco, San Jose, New York and Seattle. Single-family investors and rental managers should expect heightened apartment competition in those areas as units are completed.
The FHFA indicated that bidders were evaluated based on a number of criteria, including their rental property management experience and capabilities and overall financial strength. Although progress is being made, it remains unclear whether the bulk sales program will continue beyond this initial wave.