If I had money to invest, it would go right into the housing market. Chicago real estate values are hovering around their 2001 levels, and interest rates are at record lows. The time to buy is now.
Of course, being upside-down in my own mortgage, I am in no position to be investing in the market right now. But if you are, it is about to get even more appealing for you.
On Wednesday, President Barack Obama and the Federal Housing Finance Agency unveiled the first phase of a program aimed at adding more rental units while lowering the foreclosure rate in some of the country?s hardest-hit metropolitan areas, including Chicago.
The Real-Estate Owned (REO) Initiative would allow qualified investors to purchase pools of foreclosed properties as long as they rent out the properties for a certain number of years. This should provide additional rental options to markets that need it while lowering the volume of foreclosed properties in the nation?s hardest-hit areas.
?This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,? said FHFA Acting Director Edward J. DeMarco.
The federal government said interested investors can ?pre-qualify? to be part of the program in this initial pilot phase and subsequent phases.
The pool of properties for sale during the pilot phase will include rentals, vacancies and non-performing loans, mostly in America?s hardest-hit cities.
According to the National Multi Housing Council (NMHC), this decade could see more than seven million new renter households. To keep up with this rate, 300,000 apartments should be created each year, yet last year less than 150,000 were started due to the ailing economy.
?The President?s proposal underscores our key message that while there might be an oversupply of single-family housing, there is a shortage of rental housing. Demographics and changing lifestyles have led to a structural shift in our nation?s housing preferences to more heavily favor renting,? said Cindy Chetti, NMHC Senior Vice President of Government Affairs.
?The apartment industry remains supportive of efforts to find the bottom in the single-family housing market because it will help fuel overall economic and jobs growth, which are critical to our industry. We are pleased to see the Administration explicitly recognizing the importance of rental housing in meeting our nation?s housing needs through the Real-Estate Owned (REO) Initiative announced today.?
Interested in participating in the government?s program? Check out the FHFA REO Initiative page for more information.
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