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Fannie Mae Bans Renter Eviction

Fannie Mae announced their new National Real Estate Owned (REO) Rental Policy on January 14. This policy will allow renters in about 4,000 properties currently in foreclosure to sign new leases with Fannie Mae while the property is up for sale. Current evictions have been placed in suspension while the new policy is implemented. Michael Williams, Chief Operating Officer of Fannie Mae, says this new policy will "mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates." Mortgage finance company Freddie Mac is working on a similar policy, according to spokesman Brad German.

The new Fannie Mae policy will apply to renters occupying foreclosed property at the time Fannie Mae acquires it. Eligible renters will include those in single-family homes, as well as all sizes of multi-family properties. All properties must meet state and local laws and code requirements for rental property. Eligible renters will be offered a new month-to-month lease, or financial assistance to transition to new housing. No security deposits will be required under the program, but renters will be expected to pay market rate rents.