Fannie Mae completes first sale in REO rental initiative

San Diego-based Pacifica Cos. became the first winning bidder in a federal pilot program to sell repossessed homes to investors in bulk on Friday, purchasing 699 occupied and vacant single-family properties in Florida. The final sale price exceeded $12.3 million, according to the San Diego Union-Tribune.

The new program — implemented by Fannie Mae and the Federal Housing Finance Agency — offers foreclosed properties in bulk to investors, who must promise to convert them into rentals. The Florida properties represent 699 of an estimated 2,500 total foreclosures available under the program.

Under the terms of the sale, Pacifica will share controlling interest in the properties with Fannie Mae as a new LLC. Initially, Fannie Mae will receive 90 percent of the LLC’s rental revenue, up to the point it reaches $49 million; from there, Fannie’s share drops to 50 percent.

Pacifica will receive the balance in both situations and will also take 20 percent of the gross rental income collected as a management fee.

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