Arizona to Hand Out Funds to Buy Bank Owned Home Sales

by on States

Arizona has received about $121 million in federal grants under the Neighborhood Stabilization Program (NSP). The federal housing fund will be used to help people purchase bank owned homes sales in neighborhoods severely affected by foreclosure.

The state aims to help low and moderate income families purchase foreclosure houses and rehabilitate them. The program also targets to stop the rapid slide of home values in the state.

Since the grant was received by Arizona last April, hundreds of homebuyers have applied and qualified but the state has yet to close on bank owned homes sales.

The program started when several cities in Arizona submitted applications in which they explained where and how they would put into use the NSP grant. These cities are Phoenix, which received $39.5 million, the largest share among other cities, Mesa with $9.7 million, Avondale with $2.5 million, Glendale with $6.2 million and Chandler with $2.4 million.

Majority of Arizona’s grant is allocated in valley communities where about 65,000 foreclosures have been recorded since early last year. The state government is hoping that the NSP would help families buy thousands of bank owned homes sales in Phoenix.

New homeowners of foreclosed properties are expected to help in the immediate recovery of neighborhoods hardest hit by the foreclosure crisis.

Under the grant program, first-time homebuyers must live in the foreclosed homes they bought. Second homebuyers and investors are not allowed to join the state’s grant program. To avail of the grant, applicants are required to work with housing counselors and finish a course in homeownership and budgeting.

Meanwhile, housing advocates in Arizona said that some lending institutions are reluctant to sell foreclosed properties for less than the amount that they could get when they sell them to investors.

However, the Arizona cities and homebuyers are still hoping that the grants will be helpful in revitalizing neighborhoods severely affected by foreclosures. All recipients of the grant money are given until 2011 to spend all the funds.

The NSP funds of Arizona are targeted on homebuyers whose earnings are close to the median income in their respective cities.

Also, under the program, prospective homeowners must earn not less than $30,000 and not more than $80,000 annually to qualify for a grant to buy and rehabilitate bank owned homes sale.