WASHINGTON — The U.S. government has started selling off its stock of homes in foreclosure.
The Federal Housing Finance Agency said Monday that a group of investors purchased the first of 2,500 homes being sold as part of a foreclosure-to-rental program.
The government has control over roughly 250,000 foreclosed homes owned by Fannie Mae, 1 percent of which will be sold and converted into rentals through the pilot program.
Officials say converting the homes into rentals can reduce credit losses and stabilize home values. Homes in foreclosure sell at a 20 percent discount on average, which can hurt surrounding home values.
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.