Wisconsin City to Buy Properties on Foreclosed Home Listings

by Simon Lindsay on cities

The city of Kenosha in Wisconsin is planning to use the almost $1.7 million in federal funds to buy properties on foreclosed home listings. Recently, members of the Kenosha council approved the collaboration between the city and the Wisconsin Department of Commerce for a federal neighborhood stabilization program.

Under the program, the state is set to award the city as much as $1.73 million as part of the federal program which is intended to address the increasing number of foreclosure properties in the area.

The funds, made possible under the American Recovery and Reinvestment Act, will be used to buy abandoned or foreclosure homes and then renovate or rebuild them. According to the city's plan, it will purchase eight distressed properties and renovate six of them. It also plans to demolish and rebuild two properties using the federal funds.

Under the plan, foreclosed properties that would be acquired must be located in neighborhoods with high number of distressed properties. Industry experts said that areas hardest hit by the foreclosure crisis are those with old houses and majority of residents belong to the low and middle income categories.

The Kenosha government is committed more on buying and rehabilitating foreclosed houses because the program sets strict standards for abandoned properties. Industry analysts said that the city would likely stay away from bank foreclosed homes because many of them are still occupied by homeowners.

Kenosha city is required to place under sale contract all properties by August 15, 2010. It is scheduled to complete all reconstruction or rehabilitation activities by February 2013. According to city officials, the money for the program was authorized last February. However, the allocation process indicated that it is just about to be approved.

They said that the city is time constrained to get things on the move, adding that the program is under aggressive schedule. They hope that they could complete their target numbers on time. City officials said that they will soon start searching for potential properties for the program, adding that they are confident that they could accomplish their target.

In the event that the city failed to meet the requirements set by the program, Wisconsin has the right to reallocate the city's funding. Kenosha also plans to use a portion of the funds to provide second mortgages for prospective homebuyers.

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