The policy will allow renters living in foreclosed properties to sign new leases with Fannie while the property is for sale.

Sibling mortgage financier Freddie Mac, based in McLean, Va., is working on a similar policy, company spokesman Brad German said.

But Amy Marx, an attorney with New Haven Legal Assistance in Connecticut, said that Freddie Mac has not been responsive to requests that it do the same, and has continued evicting renters in recent weeks.

"We are thrilled that Fannie Mae has done the right thing," she said. "Our hope is that Freddie Mac will follow their lead."

Many households in Connecticut, she said, haven't been notified of Fannie Mae's policy change. Another concern, she said, is that real-estate agents charged with selling the properties won't notify tenants that they can stay.

New Haven Legal Assistance represents several tenants facing eviction on properties held by Fannie Mae.

Fannie Mae and Freddie Mac said last week that they will extend a suspension of foreclosure sales and evictions from single-family homes through the end of January.

The companies had suspended foreclosures through the holidays.

The government-controlled home-loan giants said that the extension will allow borrowers facing foreclosure to keep their homes as they work to modify more loans. *