Gov't Housing Coming To Your Neighborhood

Sometimes I feel like I've entered the Twilight Zone, that I've been transported into a parallel world where different rules apply. Consider this recent news release:

"Fannie Mae announces “Deed for Lease™” program
Fannie Mae last week announced a new Deed for Lease™ program. Deed for Lease allows borrowers to transfer their property back to the lender and then lease back the house at market rate. The lease period is for up to 12 months, with possible month-to-month contract extensions after that period. The program is designed for borrowers who do not qualify for or have not been able to obtain other loan-workout solutions, such as a loan modification.

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance also may be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31 percent of their gross income."

Does anyone have the slightest clue about the consequences of this? Imagine Fannie Mae (owned by the government) operating rental houses on your block. I shudder to think what this means to the real estate market, but I'm sure I'm worrying for no reason. Since the government is running this program, I'm sure we can expect nothing but efficiency and success.