Foreclosed homes to become affordable housing - East Valley Tribune: News

Foreclosed homes to become affordable housing

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Posted: Friday, February 13, 2009 4:59 pm | Updated: 12:58 am, Sat Oct 8, 2011.

Chandler could begin buying up foreclosed homes by the end of the year and start turning them into affordable housing.

Chandler plans to buy foreclosed homes

The City Council Thursday voted unanimously to accept $2.4 million in funding from the U.S. Department of Housing and Urban Development for “neighborhood stabilization.” A portion of the money will be used to purchase up to 15 homes in a target area bounded by Elliott and Ray roads, and from Arizona Avenue to Alma School Road, where the foreclosure rate approaches 40 percent, city officials have said.

City Councilman Jeff Weninger said the federal grant money would have just gone elsewhere if the city didn’t accept it.

“I did have some reservations about it. I gave it a lot of thought,” Weninger said. “If this was money that came straight from the general fund I would not have supported it. It’s not like we lobbied for it, I don’t believe.”

The program is aimed at preventing the neighborhood’s decay because of the high vacancy rate, officials have said.

“This is one of the older parts of Chandler that sometimes, unfortunately, gets ignored a little bit,” Weninger said.

Judy Register, the city’s neighborhood resources director, said a proposed land bank would likely be managed by the Tempe-based nonprofit NewTown Community Land Trust and overseen by Chandler officials. It could begin buying up foreclosed properties by the end of this year.

The federal money is part of the nearly $4 billion Housing and Economic Recovery Act signed by President Bush in July to help local governments deal with the high foreclosure rate. If more federal funding becomes available, the program could be spread to other areas, city officials have said.

About $1.4 million would be used to buy up to 15 foreclosed homes in the target area, she said. The trust would retain title to the land, while potential homeowners would purchase only the home itself. That means a more affordable price.

The sale of trust homes would be restricted to people who earn between 80 percent and 120 percent of the area’s median income of $51,350 a year for a family of four.

Families who earn $41,080 to $77,050 annually would be eligible, and the home would have to be owner-occupied, and not rented out. Any subsequent owners would have to meet those conditions, as well.

Officials also propose to spend $605,000 of the grant money on several foreclosed multi-unit housing complexes. Those units would be rented to families who earn $32,100 a year or less.

Another $100,000 would go toward assisting qualified home buyers with downpayment assistance, secured with a 10-year forgivable lien on the property. And $241,500 would go toward administration costs.

Register said the city will begin looking for additional partners to manage the multifamily housing and downpayment assistance programs in the next several weeks.

“We know there are multiple nonprofits in the Valley who could partner with us,” she said.

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