Bank foreclosure homes will get the attention of Monterey County supervisors and six cities in California. County supervisors have approved an agreement with six cities severely affected by the housing market crisis to purchase bank foreclosure homes, rehabilitate and re-sell them to low-income homebuyers.
Under the agreement forged between the county and cities of Seaside, Gonzales, Marina, Soledad, Greenfield and King City, the Housing and Redevelopment Agency would try to apply for the $2.1 million federal economic recovery grant fund in behalf of the parties involved.
The money will be used to fund the cities’ Neighborhood Stabilization Program which involves buying bank foreclosure homes at 15 percent less than the market rate, make some minor repairs and improvements and sell them to eligible buyers who have very low, low and moderate income.
Eligible buyers include families who are earning not more than 120 percent of the median income in the area. The funding would also be used to provide down payment assistance and educate potential buyers.
The city of Salinas has decided to apply on its own for the federal grant for its Neighborhood Stabilization Program.
Meanwhile, Jim Cook, Monterey County’s Director of Redevelopment and Housing, explained that the program is aimed at restoring the quality of the housing stock in the area.
Additionally, the program is expected to reduce the number of vacant bank foreclosure homes in the area that has remained unsold and the associated foreclosure-related problems of theft and vandalism.
Furthermore, the program is intended to boost the area’s plummeting home values and strengthen the housing market.
In 2008, home prices in the state dropped precipitously. And the flood of bank foreclosure homes has made the situation worse and hinders efforts to revive the housing market.
According to Cook, the collaboration between the cities and the county provide a chance for smaller local governments in California to qualify for the federal funding, which mandates a minimum bid of $1 million.
Under the agreement, the Monterey County would have full control of the funding and the responsibility to disburse it to the cities.
Cook estimates that the program would initially buy, rehabilitate and sell 40 houses, with a potential to flip more bank foreclosure homes in the future as other financial sources become available and initial investments start to return.
He added that the grant has a December 30 deadline for use, therefore the county and its city-partners should move fast if they qualify for the funding to buy available bank foreclosure homes.
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