Assistance to Buy Foreclosed Properties in Massachusetts
September 28th, 2009 by 
jkingstone
The Massachusetts city of Worcester has launched an initiative that will provide incentives to buy foreclosed properties. The multifaceted Neighborhood Stabilization Program (NSP) involves buying foreclosure homes, rehabilitating or demolishing them to give way to new houses.
The NSP will also help rehabilitate the homeless shelter, People in Peril. The shelter will be replaced with a triage facility that will provide alternative housing and other services for people who have no homes, according to Worcester Manager Michael V. O’Brien.
Industry experts said that it is not unusual to see homeless people sleep in vacant and foreclosed properties that are dilapidated and should be demolished. Experts said that homeless people can also be found sleeping in houses that were torn down half.
The rising foreclosure problem in the city has led officials to use the program, Buy Worcester Now to help owners buy foreclosed properties. Under the NSP, about $12 million federal and state funds will be used for over one year and a half to support the Buy Worcester Now program by helping potential buyers purchase and renovate vacant and foreclosure homes.
O’Brien said that a portion of the funds will be used by the city to demolish chronic problem foreclosure properties to give way for the construction of new houses and mixed-use developments.
The initial focus of the NSP are the areas of Main South, Chandler and Piedmont. Local officials will determine whether the program warrants expansion to other areas. Meanwhile, the city has also applied for additional federal funds of $10 million to continue the NSP program in the area.
Under the NSP, the city will partner with several private lenders and state agencies, such as the Department of Housing and Community Development and the Massachusetts Housing Partnership, to provide financial assistance to potential developers and homebuyers.
Additionally, individual homebuyers are eligible to receive as much as $40,000 for the rehabilitation of a qualified foreclosure property. Similarly, developers are set to receive about $120,000.
For the first eight months of this year, the city posted 330 foreclosure deeds. The posting of foreclosure deeds is the final phase of the foreclosure process. The figures are less than the 525 posted for the same period last year.
However, market data showed that the number of foreclosure filings rose to 828 from 656. And the city government is committed to entice potential buyers and investors to buy foreclosed properties to prevent them from becoming blights to neighborhoods.
