Freddie Mac Rental Initiative
Freddie Mac provides options to occupants of Freddie Mac homes that allow them to remain in the home and transition to more permanent housing.
Shortly after Freddie Mac purchases the property at foreclosure, occupants will soon receive a letter entitled "You Have Options" that explains the different opportunities they may have to stay in the home under an existing lease with the previous homeowner, a new month-to-month lease under Freddie Mac's REO Rental Initiative, or financial assistance to help them move to a new home. The "You Have Options" letter also provides the occupant with contact information for the real estate agent if they are interested in pursuing one of these three options. It is important that all information requested by the real estate agent is provided.
Continuation of Prior Lease
Under some federal and state laws, tenants may have the option to stay in the home under their former lease while Freddie Mac markets and sells the property. Freddie Mac complies with all applicable landlord-tenant laws including those that would allow an eligible tenant to stay until the expiration of their old lease. Tenants that receive rental assistance, such as "Section 8" assistance, may also be eligible to continue to rent the property under their existing lease. After the tenant has received the "You Have Options" letter, the tenant will need to provide the real estate agent or property management company a copy of their old lease so they can review it to find out whether it qualifies for this option. The tenant can also choose to sign a new lease with Freddie Mac under the REO Rental Initiative if they are eligible.
Freddie Mac REO Rental Initiative
Freddie Mac's REO Rental Initiative will give qualified families living in recently foreclosed eligible properties acquired by Freddie Mac the opportunity to sign a new month-to-month lease with Freddie Mac, allowing them to stay until they can find a new place to live or the home is sold.
Eligible properties under the REO Rental Initiative must be in good condition and meet all applicable health and safety building codes or can be brought into suitable condition within a reasonable amount of time and expense. The properties will be inspected by a trusted business partner of Freddie Mac that will also be responsible for preparing leases and responding to tenant requests and concerns.
To qualify for the REO Rental Initiative, the potential tenant must:
- Demonstrate the ability to pay market rent on the property.
- Pass a background check.
- Sign a new month-to-month lease.
- Allow an inspector to enter and inspect the home.
- Sign a property-condition disclosure at inspection and allow contractors to repair deficiencies in the property, if necessary.
- Cooperate with marketing activities; allow the property to be shown to prospective buyers and real estate agents, keep the home clean and safe as well as meeting state and local code requirements.
If an occupant chooses to vacate the property, Freddie Mac may offer financial assistance to help them move. Occupants accepting relocation assistance must leave the property by a specified date, in "broom-cleaned" condition and free of personal belongings or debris as well as comply with the other terms and conditions of the relocation assistance agreement.
Freddie Mac's REO Rental Options can help ease a foreclosure's impact by giving renters and former owners more time to determine what options are best for them and their families. We are committed to these efforts and the added benefit of stabilizing property values and local communities by keeping homes occupied and maintained.