Nevada Democrat calls on FHFA for transparency in home purchases by institutional investors

Citing an issue in which families across Nevada do not have the resources to compete with institutional investors that buy up single-family homes, Rep. Susie Lee (D) has called on Federal Housing Finance Agency (FHFA) Director Bill Pulte to offer transparency when out-of-state landlords purchase foreclosed single-family homes.

Lee, who represents part of Las Vegas and unincorporated Clark County, submitted a letter to Pulte on Monday in which she seeks “information about recent foreclosure activities and post-foreclosure dispositions in Nevada.” Lee requested data about how many foreclosures have taken place in Nevada over the past two years and information about how the foreclosures were processed.

Specifically, she’s seeking information about “participation of out-of-state corporate entities in post foreclosure dispositions of properties sold to third parties or real estate owned (REO) properties executed by Fannie Mae and Freddie Mac and steps taken by the [FHFA] to protect local homeowners.”

Like much of the country, Nevada is facing a housing shortage. Lee told Pulte that the state’s supply and affordability challenges are being exacerbated by “corporate landlords and cash rich investors, many of which are based outside of Nevada, outbid[ding] working families for available homes and further jack[ing] up prices.”

Lee claimed that as many as 15% of these homes in Nevada are owned by such entities. She also mentioned, without providing a citation, that studies suggest that “corporate entities could own up to 40% of homes nationwide by 2030.” That finding is consistent with a 2022 report from Yardi Matrix.

Lee has requested several pieces of information from Pulte, including details about foreclosure sales that were sold to third-party buyers “at the courthouse steps.” She also asked whether the agency has a means of tracking in-state and out-of-state entities that participate in the foreclosure disposition process; what properties are excluded from a foreclosed “first-look” period; and whether any FHFA policies serve to protect local homebuyers through the process.

The housing politics of the state is unusual, as the divided government at the state level has led to disagreements between the Democratic-controlled Legislature and the Republican governor.

This is further complicated by the vast swaths of federal land in Nevada that federal lawmakers and other officials want to see repurposed for housing.