Mesa housing program ready to bear fruit

A Mesa plan to help low-income people buy homes seemed almost too easy: Snap up foreclosed homes on the cheap, renovate them and sell houses to those in need.

But the plan nearly froze this summer as the city found itself unable to buy even the most run-down homes as frenzied investors got into bidding wars and drove up prices. Also, banks wanted to deal with private buyers, not the city. Even worse, Mesa feared it wouldn't meet a deadline the federal government set to spend $9.6 million on the project.

The city has turned around the effort, and some homes are nearly ready to be sold after renovations turned some of the worst houses in some neighborhoods into some of the nicest.

The houses are in the 85204 ZIP code, which Mesa targeted because it has a high number of foreclosures, code violations and crime problems. The city wanted to turn around the area by transforming blighted houses that were a magnet for crime. That meant Mesa avoided buying any houses that were in good shape, said Raymond Thimesch, who coordinates Mesa's Neighborhood Stabilization Program.

"I'm looking for the opposite," Thimesch said. "I want to fix it up. I want to make it nice."

The city paid an average of $62,000 for the 15 houses it's bought so far. Of the nine it is renovating so far, Mesa plans to spend slightly less than $62,000 on repairs.

The repairs include replacing roofs, installing dual-pane windows, adding energy-efficient appliances, installing new air-conditioning units, replacing plumbing and electrical, and painting everything. The city wants to sell homes in good enough shape that the low-income buyers shouldn't have to make any major repairs for at least 15 years.

In many cases, the projects included tearing down illegal additions and carport enclosures.

The program is part of the U.S. Housing and Economic Recovery Act of 2008, which sets aside nearly $4 billion nationally to help struggling neighborhoods. Mesa ran into trouble at first because it had to bid on properties, yet federal regulations required the city to pay 15 percent less than the appraised value. When bidding wars started, the city lost every time. The federal government then changed the regulation to just 1 percent below the appraised value.

But still, banks were reluctant initially to work with the city. The banks have now given the city access to some properties before they are listed. Once the changes took effect, the city had no trouble buying homes.

"Initially there was a little concern that we were even going to get the project off the ground," said Vice Mayor Kyle Jones, whose district covers the area. "But once we worked out the kinks, it's gone very well."

The city must spend the money by September to get the federal money.

The houses can only be sold to buyers who meet certain income levels, and participants must complete classes before they qualify to look at homes.

The city is also buying multifamily housing complexes. Also, the city will make funds available for homeowners whose houses have been badly damaged and need to be rebuilt. Already, the city is working to rebuild a home damaged by fire so the owner can return.

The homes in the 85204 ZIP code are in an area bounded by Mesa and Val Vista drives, and by Main Street and Baseline Road.

The nonprofit Housing Our Communities is offering the training participants need to qualify. Gracie Hernandez, a housing counselor with the organization, said the program will help buyers at a time when investors have made it more difficult for low-income people to buy affordable housing.

"That's a big concern, and a big issue right now in the market in general," Hernandez said.

To learn more about the program and eligibility requirements, visit the NSP Homeownership Program link on www.mesaaz.gov.