by wildcherry on Friday, November 6th, 2009 | Business, News

Fannie Mae rental program will allow one-time homeowners that have allowed their house to go into foreclosure to actually rent the very same house back at “market value” in something called a “Deed for Lease” program. Taxpayer cost is not yet clear.

To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. Rents are based on current market rates.

The plan is expected to be particularly attractive in places like Phoenix or Orange County, Calif., where homeowners are stuck paying large mortgage bills on properties that are now worth far less than they originally paid. At the same time, rents have been falling in those areas. So by renting the same house, former homeowners could wind up paying far less every month.

Fannie Mae execs believe it is a good solution to the thousands of bad loans littering neighborhoods and causing blight as homes sit vacant and begin to deteriorate.

The Wall Street Journal reports: “The “Deed for Lease” Program lets borrowers who don’t qualify for loan modifications transfer their property to Fannie Mae in exchange for a lease. Borrowers-turned-tenants will pay market rents, which in most cases are lower than the cost of mortgage payments, and might be offered extensions when their leases expire.”

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The program helps “eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities,” Jay Ryan, a Fannie Mae vice president, said in a statement.

AOL News notes, “Fannie Mae’s sibling company, Freddie Mac , launched a similar effort in March. That policy, however, requires the foreclosure to be completed and only allows month-to-month leases.”

The new plan for dealing with the aftermath of the real estate crisis, called the “Deed for Lease” plan (since “this for that” themed plans apparently work really well for fixing the economy) So if you can’t qualify for a home loan under the new regulations, but want to try and keep your home, you will now get a one year rental period from Fannie Mae, that gives additional time and opportunity to work towards keeping your home that you’ve invested so much in.

Freddie Mac has had a similar deal in place for some time as well, with somewhat different regulations on how the home can be rented after it is fully foreclosed. Hopefully more such compromises can be found, so that the many hard working families caught up in this crisis will not have their lives turned upside down.

Tags: "Deed for Lease", Fannie mae, Fannie Mae rental program, Fannie Rent, foreclosed home, Foreclosure, Freddie Mac, Home Prices, Housing Crisis, Mortgage Crisis, Real Estate, rent foreclosed home