Feds move to convert foreclosures to rentals

WASHINGTON — The government seeks to sell off some of its stock of homes in foreclosure.

The Federal Housing Finance Agency has control over roughly 250,000 foreclosed homes owned by Fannie Mae. One percent of those homes, or 2,500, will be available for investors to buy and convert into rentals.

Officials say the foreclosure-to-rental program can help reduce credit losses and stabilize home values. Homes in foreclosure sell at a 20 percent discount on average, which can hurt surrounding home values.

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Investors can submit applications to purchase properties owned by Fannie in some of the nation's hardest hit metro areas - Atlanta, Chicago, Las Vegas, Phoenix and parts of Florida.

The government rescued Fannie and its sister organization Freddie Mac in September 2008 and has funded them since the financial crisis.