Archive for the 'Minnesota' Category

Renters are fulfilling their dreams of home ownership by buying repossessed homes in the Minnesota city of Elk River with financial assistance from federal and state housing funds.

The state of Minnesota has combined its Greater Minnesota Housing Fund and its share in the federal Neighborhood Stabilization Program to help Elk River renters buy foreclosure homes.

The program would accomplish two objectives: reduction of the number of vacant foreclosed properties and provision of affordable housing opportunities to residents.

The program provides each qualified applicant a total of $15,000 for the purchase of a foreclosed house. The amount of $10,000 comes from the Greater Minnesota Housing Fund and $5,000 comes from the NSP fund program. The money is provided as a zero-percent loan, which will be forgiven if the home buyer occupies the house for 5 years.

Elk River received a total of $593,000 from the NSP early this year and it is now beginning to implement the housing program. A used car lot employee who has been residing in Elk River for 36 years became the first home buyer to be helped by the program. He bought a foreclosed two-bedroom Trout Brook Farm townhome, which had been vacant for two years.

There are requirements that applicants need to pass to be eligible under the program. The first successful home buyer said he was helped by Landmarq Lending to go through the process.

Cathy Mehelich, head of economic development at Elk River, explained that applicants are first screened and pre-approved and then directed to choose from an inventory of pre-evaluated foreclosed homes in certain neighborhoods.

Financial assistance from the housing program can be used by homebuyers to complete their down payment or to help them pay for needed repairs. Some of the funds will also be used by the city to buy foreclosure properties, fix them and then resell them.

The NSP program was enacted by Congress in July 2008 to help state and local governments prevent their neighborhoods from going into decay as foreclosures continue to batter communities. It funded NSP with $3.92 billion in its first funding round in 2008 and then funded it with $1.93 billion in its second funding round in 2009.

U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan has praised the way the city of Minneapolis, Minnesota used the stimulus money to contain the number of properties on repo home listing.

He cited the success of the city’s program under President Barack Obama’s stimulus plan. So far, the city was able to buy a total of 168 properties on repo home listing, at bargain prices. Under the program, the city buys foreclosed homes using the federal stimulus fund, rehabilitate and sell them.

During his visit to the city, Donovan said that Minneapolis is using the federal funds to rehabilitate distressed properties in a green way. Minneapolis Mayor R.T. Rybak and community planning and economic development director Tim Streitz told Donovan that some renovated homes are equipped with central air conditioning and energy efficient windows. They added that the work was done by local contractors.

So far, the city has received a total of $14 million federal grant which it plans to use to renovate 945 properties on repo home listing. The rehabilitated homes will then be sold to families who are planning to live in them to help maintain the neighborhoods.

According to Donovan, a total of $3.5 billion is allocated to Minnesota, which can be translated to 66,000 jobs created or saved.

Meanwhile, Senator Amy Klobuchar said that the federal government should intensify its efforts to prevent the foreclosure crisis that still threatens many neighborhoods. She pointed out the need to work with banks to help distressed homeowners who want to remain in their properties and negotiate their loans.

So far, the Obama Administration’s foreclosure prevention program has helped about 270,000 distressed homeowners modify their loans for affordable monthly payments. But Donovan admitted that the numbers are not enough to help the housing market recover.

Many industry experts said that more than 3.5 million homeowners are expected to lose their properties to foreclosures before the end of this year.

Donovan said that about 20,000 to 30,000 troubled loans are modified per week. He said that if the pace of loan modifications continues to increase, it will not be long before millions of loans would be modified and the number of properties on repo home listing would start to decline.

Search foreclosures by city:

• Foreclosed Homes in Miami
• Foreclosed Homes in Brooklyn
• Foreclosed Homes in Houston
• Foreclosed Homes in Chicago