Around $18 million is allotted to be used by the city of Boston, Massachusetts to help distressed homeowners avoid foreclosures and for potential buyers to purchase properties on foreclosed homes listings.
The one-year Homeownership Stabilization Campaign aims to help neighborhoods in Boston severely affected by high foreclosed homes listings.
The two-part initiative will give equity to distressed homeowners, help stabilize home prices and strengthen the housing market in neighborhoods with high repossession rates. The program will give assistance to new buyers in acquiring properties.
Out of the $18 million funding, $10 million was provided by the U.S. Department of Housing and Urban Development (HUD), $4 million from the Massachusetts Department of Housing and Community Development and the remaining $4 million from the city government.
The funds are 200 percent larger compared with the 2008 homeownership budget. The additional amount for this year is made possible by the $8.2 million funds provided under the Neighborhood Stabilization Program that the city received to help stem the tide of properties on foreclosed homes listings.
Additionally, the city is also lining up for a $39 million federal grant from the HUD as part of the Neighborhood Stabilization Program 2.
Mayor Thomas M. Menino announced that the city has nearly 928 foreclosed properties in Dorchester, East Boston, Roxbury, Mattapan and Hyde Park. He explained that the goal of the initiative is to make sure that distressed properties are redeveloped. So far, the city has acquired 12 foreclosed homes and is planning to buy 90 additional bank-owned properties.
Out of the $18 million funds, $11.6 million are allocated for the renovation of repossessed properties bought by the city of Boston, provide funding to new homeowners for rehabilitation of foreclosed properties and down payment assistance for buyers of foreclosed homes.
The funds will also provide subsidies for nonprofit and private developers to rehabilitate foreclosed properties and will offer home equity mortgages to homeowners.
Furthermore, the program will provide about $6 million for current homeownership initiatives that offer repair assistance to older homeowners, lead paint abatement and home buying education.
Meanwhile, properties on foreclosed homes listings accounted for 6.5 percent of the total sales of single-family homes in Massachusetts in the first half of this year. In Boston, property prices dropped by 19 percent since the housing market boom in September 2005.
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