Solving Foreclosure Crisis, a Rental at a Time
Aug. 12, 2011— -- Turning foreclosures into rentals: Could this be a solution to the foreclosure crisis in America?
On Wednesday, the Obama administration announced it is soliciting ideas for ways to turn a half million foreclosed homes into affordable rental properties.
The Home Affordable Modification Program hopes it can be the ticket to boosting falling home prices and transforming thousands of government-owned foreclosures into homes with families.
Officials say they'll be listening for ideas until Sept 15.
Dayne Francis, an investor in Atlanta, said he has plenty to share. He and his family have bought eight foreclosed homes already this year for pennies on the dollar and transformed them into rentals. In June, they bought their latest foreclosure for $22,000. After $15,000 in upgrades, they expect to have the home rented to a family next week.
His sister-in-law, Candis Francis, the realtor of the family, said the family would buy up even more foreclosures, but getting loans is tough, and they usually play cash. With better access to credit, she said, more investors would put "more skin in the game."
"If the government would get involved and offer more affordable finance options for investors, it will make things a lot easier," she said.
Dayne Francis, who runs the money end of the business, told us these new ideas "would probably take 50 to 75 percent of the properties off the market within a year or two, tops."
In addition to easier financing, experts say, the government could help by tweaking a few rules -– giving tax breaks to investors who can't collect enough in rent to pay the mortgage on their newly purchased foreclosed home.
There's talk of encouraging more investors to buy the homes of distressed families, allowing the family to remain in the home and charging them an affordable rent.
Foreclosures Into Rentals: Immediate Impact?
It worked for JR Klimach and his partner, John McKay.
