Stockton Asks More Money to Fix Repossessed Houses for Sale
San Joaquin County and its county seat, the city of Stockton, will team up to apply for another $21 million in funding from the Neighborhood Stabilization Program of the Housing and Urban Development Department to buy, repair and resell repossessed houses for sale.
In the first round of NSP funding, Stockton, San Joaquin and the San Joaquin Housing Authority received a total of $21 million. The money was given to a group of four nonprofit housing developers which were tasked to buy foreclosed houses, rehabilitate them and then resell them as affordable homes to eligible families.
But the nonprofit-run NSP program has not been progressing as expected by San Joaquin and Stockton. As of date, only five repossessed houses for sale have been purchased and they are still being repaired by Service First of Northern California, the contractor hired by the nonprofits to fix the five properties.
The nonprofits explained that there had been impediments to the progress of the program. These include the implementation of several foreclosure moratoriums across the state, overpricing of repossessed houses for sale and constant changes in the resale policies of lenders.
One major reason for the difficulty of the nonprofits in buying repossessed houses for sale at auction is the program requirement that the properties should be purchased at prices 15 percent lower than their listing prices. This was an impossible requirement as home prices have already dropped to very low levels and the lenders refused to reduce their home prices further.
According to San Joaquin County, program officials have reduced the discount requirement to 1 percent.
John Moore, head of San Joaquin Community Development Department, said the NSP put several restrictions on how the first round of funding should be spent. For instance, the funding should only be used to acquire repossessed houses for sale in neighborhoods that have been struggling with the biggest concentration of foreclosures in the area receiving the funding.
The second-round NSP funding, according to Moore, would have fewer restrictions. This second-round funding was authorized by Congress under the American Recovery and Reinvestment Act, which it passed this year.
In the second-round NSP funding, the San Joaquin Housing Authority applied alone, without collaborating with another entity. Housing Authority chief Barbara Kauss said her organization plans to buy and fix repossessed houses for sale around the aging Sierra Vista government housing project, which it also plans to rebuild.
Related Posts:
- Vegas Repo Houses for Sale Finally Got Attention from HUD
- Number of Homes Under Fresno Foreclosure Auctions Not Enough to Get Aid
- BCC Buys Homes from Boston Foreclosure Auctions for Families
- Problem of Foreclosed Oakland Home Auctions for Sale Eased Down
- Prices Improve as Los Angeles Home Auctions for Sale Decline
