Michigan City Purchase Foreclosed Homes HUD for $1
The Lakeshore city of Michigan has bought foreclosed homes HUD from the U.S. Department of Housing and Urban Development (HUD). Under the HUD’s Good Neighbor Program, municipalities are given an opportunity to acquire a foreclosure house for $1 in addition to closing costs.
The foreclosed houses that the city purchased under the program will be renovated by the Lakeshore Habitat for Humanity. The Lakeshore City Council has approved the offer of the nonprofit organization to acquire the foreclosure houses for prices ranging from $10,000 to $20,000.
The Lakeshore chapter of Habitat plans to demolish the foreclosed homes and build new houses. According to industry experts, many cities and counties in Michigan and across the country have availed of federal grants to help them purchase foreclosure properties in neighborhoods hardest hit by the foreclosure, renovate them and sell or rent them at affordable rates to low-income and moderate-income families and individuals.
On the part of Lakeshore, the city plans to sell the homes purchased from HUD and renovated by Habitat to low and middle-income families. The city will use proceeds from the sale to benefit some of its local community development programs.
Experts said that some cities and counties have also the option to use proceeds from the sale or rent of renovated foreclosed homes to buy more distressed properties to provide affordable housing units and at the same time help wipe-out the growing number of foreclosures that has been pulling down home prices and values.
Lakeshore Habitat plans to recycle as many building materials from the deteriorating foreclosed homes for new houses. The newly built houses will then be sold under the nonprofit organization’s Restore house improvement business. Jack Zandstra, executive director of the Lakeshore Habitat, said that the organization is committed to environmental awareness.
Habitat hopes to spend about $86,000 for the demolition and building of one property located in Pleasant Avenue and $60,000 for another home.
Meanwhile, the first HUD-foreclosed home purchased by Lakeshore will soon have a new owner. Homecor bought and rehabilitated the first house last year and is expected to close deal with new homeowners.
Homecor spent an estimated $35,000 to improve the foreclosed home which features energy-efficient windows, new bedroom and fresh paint.
Lakeshore officials are optimistic about the program and are seeking for additional ways to purchase more houses on foreclosure listings.
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