Carrington Holding Co. and Oaktree Capital Management formed a partnership to buy up to $450 million in vacant foreclosed homes with a plan to rent them out. The move falls in line with the Federal Housing Finance Agency, which said earlier in the month it was readying programs to beginning selling repossessed homes held by the government-sponsored enterprises in bulk. The first transactions are expected in 2012. Carrington currently manages more than 3,000 rental homes under a Fannie Mae program. John Brady, the Oaktree head of global real estate, said Carrington's rental program fit its investment strategy. "We believe that this is not only a unique investment opportunity with few qualified large-scale competitors, but one that also has the potential to have a broader positive effect on the housing market and the overall economy," Brady said. In the fall of last year, the FHFA and other agencies put a request for information out to the industry to help developing such a program. At the end of the third quarter, Fannie and Freddie Mac held more than 180,000 in REO with another 40,000 owned by the Department of Housing and Urban Development. Carrington CEO Bruce Rose said that converting vacant REO into rentals will help revitalize neighborhoods crippled by sinking home prices and reduced property tax revenue stemming from blight. "Reducing the number of distressed properties for sale can help stabilize home prices and putting families into currently vacant homes can begin the healing process for neighborhoods that have been damaged by foreclosures," Rose said. Still, the deal does not necessarily mean Carrington and Oaktree will be limited to government-owned REO. "While we’d be delighted to participate in an FHFA program that would include Fannie Mae and Freddie Mac REO properties, this initial phase will not specifically target those properties," said Carrington Executive Vice President Rick Sharga in a statement to HousingWire. "We’ll be looking to acquire a portfolio of properties that meet our investment criteria, regardless of which entity happens to own them." Write to Jon Prior. Follow him on Twitter @JonAPrior.