$32 Million to Restore Bay Area’s Foreclosed Homes

by Peter Vernon on Foreclosure Help

Bay area communities received a total of $32 million from President Obama’s Neighborhood Stabilization Program to purchase foreclosed homes and then rehabilitate them for affordable housing and rental properties. The money was the area’s share of the $3.92 billion budgeted in 2008 by Congress for the stabilization program. This year, Congress allocated another $2 billion to the program.

Patrick Lynch, housing director of the Bay Area city of Richmond, and his staff visited several foreclosed homes around the city and identified units that can be purchased by the city to be repaired. He said the city will be equipped to stabilize some neighborhoods of foreclosed homes with the NSP funds and with the help of community housing developers.

The Bay Area funds were distributed to cities and counties with the highest number of foreclosed homes. Richmond got $3.3 million, higher than what Vallejo and Alameda County received — $2.7 million and $2.1 million, respectively. The highest allocations were given to Oakland and Contra Costa County, which had the highest number of foreclosed homes, receiving $8.3 million and $6 million, respectively. San Jose got $5.6 million while Antioch got $4 million.

Under the NSP rules, the funds must be used to buy, repair and sell or rent out foreclosed homes to low-income families. Homebuyers must also be assisted in getting affordable financing. The money can also be used to buy land for future redevelopment or acquire condemned foreclosure properties for demolition and rehabilitation.

Rose Cade, an executive of the housing nonprofit Northern California for Enterprise Community Partners, said the funds are timely because blighted neighborhoods will deteriorate into worse conditions if they are not rehabilitated.

Richmond has already identified the locations of foreclosed homes it is going to rehabilitate. At the Iron Triangle, it will buy foreclosed homes near the Trinity Plaza and the Nevin Park revitalization projects. In North Richmond, it will rebuild foreclosed houses near a housing complex for seniors.

Richmond’s housing director Lynch said it will leverage the NSP funds by requiring contractors to support the apprentice program of Richmond Build. Contractors will hire Richmond Build graduates to do electrical work, carpentry, solar installations and plumbing work on the foreclosure properties.

Lynch said his agency can buy good foreclosed homes up to $60,000, fix them and make them available for lower-income families.