City to Buy and Sell HUD’s Repossession Homes
Mansfield, Ohio is eligible to receive about $1.7 million federal funds under the Neighborhood Stabilization Program (NSP). In line with the plan, Fair Housing Director Don Mitchell has requested the city to authorize him to purchase repossession homes from the Department of Housing and Urban Development (HUD) or Federal National Mortgage Association.
Under the program, the city will buy foreclosed properties and resell them. If properties needed repair, money would be available. Low and moderate income families should qualify for bank loans to buy repossession homes and should live in them for not less than three years. However, they could apply for financial assistance from Mansfield.
Starting July, applications to buy foreclosed properties, mostly located in four neighborhoods hardest hit by the foreclosure crisis, will be accepted by Mansfield’s economic development office.
According to Mitchell, the city has requested enough funds to purchase, rehabilitate and resell as many as 15 repossession homes. He added that the number of properties to be purchased will actually depend on sale prices and the extent of repairs needed.
It is expected that Mansfield will do some major repairs on plumbing, eliminate molds and make furnaces and windows energy efficient.
Mitchell said that out of the $1.7 million that Mansfield stands to receive, $400,000 is allocated for city permits and codes to demolish some blighted houses that are pulling down home values in distressed communities.
He requested the City Council to raise to $35,000 from $25,000 the money that will be used to purchase repossessed homes without seeking approval beforehand.
According to Mitchell, he is currently allowed to purchase HUD houses worth not more than $50,000 without seeking permission from the council.
Mansfield will pay 50 centavos on the dollar for every home worth not more than $100,000. For properties appraised not more than $20,000, the sale price is $100. If the city council will approve Mitchell’s request, he would be able to buy repossession homes valued between $50,000 to $70,000.
Ohio is one of the top 10 states in terms of high foreclosure rates. Last May, one out of 446 houses is in some kind of foreclosure proceeding.
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