City to Buy Repossession Houses for Affordable Housing
To find use for repossession houses that blighted neighborhoods and to reduce their numbers, the city of Oxnard will purchase them and turn them into affordable housing for low income families.
The Ventura County Board of Supervisors have also approved a similar plan which would allow the county to join the city in applying for the Neighborhood Stabilization Program grants to purchase abandoned and vacant repossession houses and rehabilitate them into affordable housing for low income families.
The county is overseeing the grant program for Oxnard and nine other cities, as well as other unincorporated areas. The communities within the area are hoping to secure about $2.7 million in federal grant money.
On its part, the city of Oxnard made a separate funding application amounting to $2 million. The Neighborhood Stabilization Program is part of the economic stimulus program and the Obama Administration is expected to boost the program with more funding.
Under the program, the grant can be used only to buy repossession houses that have been abandoned and vacant for 90 days. All recipient cities and counties are required to pay not higher than 85 percent of the appraised value of each property.
According to Deputy County Executive Officer Christy Madden, the restriction on the federal grant will make it difficult to counties and cities to comply with the March deadline for full disbursement of the funds.
She added that banks are swamped with interested potential buyers for foreclosed homes and there is a great possibility that financial institutions would not want to deal with local governments that want to purchase distressed properties at great discounts.
Local and state lobbyists are hoping that the restriction on the use of the federal grant would be removed.
Meanwhile, Board of Supervisors member Peter Foy, who voted against applying for the grant, pointed out that it is not a good investment move for the local government to purchase single-family repossessed homes.
On the other hand, supervisors who voted for grant application argued that the federal program is a good way to find foreclosed properties that can be converted into affordable housing for needy residents, including young people who just came out of foster care.
Initially, Oxnard city will purchase about eight repossession houses, convert them into affordable housing and sold them with a condition that if they will be placed on the market for sale within five years, it should be sold to another low income or moderate income family.
