North Carolina Town Buys Bank Foreclosure Homes

by on States

The town of Benson in North Carolina has received a federal grant to buy bank foreclosure homes. The town gets a total of $755,000 in Community Development Block Grant (CDBG) made possible by the U.S. Housing and Urban Development (HUD).

The town of Benson applied for the CDBG funding in the fall of last year and received approval in the spring. A local match of $85,000 will be added to the CDBG funds, bringing the total amount of funds to $855,000 which will be used by the town to revitalize the Hall and East Branch streets area.

The CDBG program was launched by the HUD in 1974 to provide funds to communities to help them improve neighborhoods blighted by the growing number of bank foreclosure homes. According to town officials, the CDBG funds will be spent to rehabilitate 12 houses, demolish three houses, pave streets and upgrade sewer lines in selected areas. They said that the grant will benefit mostly property owners with low and moderate income.

The community revitalization project is slated to start in about a month’s time and expected to be completed in eight months. Officials explained that they wanted to address neighborhoods that have been identified to have sewer problems, to initiate redevelopment and stabilize neighborhoods.

The grant will greatly help owners of single-family homes. Town officials intend to expand the program and are planning to request members of the town planning board to provide recommendations for areas to be helped by the program.

The Wooten Co. of Raleigh has helped the town government identify the first 12 houses that will receive assistance. Representatives of the company said that they identified areas that have in great need of housing rehabilitation, adding that many of these properties belong to low-income and moderate-income owners.

Landlords or homeowners of the properties identified in the program are not expected to repay the CDBG funds provided that they do not sell the rehabilitated homes. If they sell the renovated houses, owners are required to repay the money spent on the house to the town of Benson which will then turn over the payment to the HUD.

Industry experts agree that federal programs providing grants to neighborhoods blighted by bank foreclosure homes are a great way to reduce the number of foreclosure properties that have glutted the housing market for some time now.