Freddie Mac, the government-sponsored mortgage finance institution, said Friday it will allow some foreclosed borrowers to remain in their homes as renters.

Freddie Mac, the government-sponsored mortgage finance institution, said Friday it will allow some foreclosed borrowers to remain in their homes as renters.

The new policy's direct effect will be modest. Freddie Mac has about 8,500 properties in foreclosure, and many are vacant. Nationwide, various estimates place the number of homes in foreclosure at more than 2 million.

But economists and fair housing advocates who have called for such rental programs as a way to prevent neighborhood blight say Freddie Mac's policy could be a model for a broader program to enable foreclosed borrowers to rent their homes.

Homes abandoned after foreclosure often become neighborhood eyesores as lawns die, homes are neglected and, in some cases, vandalism occurs. Local officials say such properties can hurt overall property values in their neighborhoods.

"Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market," said Freddie Mac chief executive David M. Moffett.

The Freddie Mac program would charge foreclosed home occupants market-rate rents. As rents fall in many cities, the former homeowners generally would pay far less per month in rent than their previous mortgage payments. Freddie Mac also will allow those who are living in foreclosed homes as renters to continue as tenants with month-to-month leases.