Buying Home Foreclosures Made Possible by Federal Funds
November 3rd, 2009 by 
jfoxx
The local government of Stanislaus County, California has received federal funds to help families in buying home foreclosures. It took more than one year for the county to complete the process to be able to obtain the federal funds. But now, it has started to help families in terms of down payment.
The county is not alone in its program to help eligible buyers in buying home foreclosures. Many areas across the country are also giving out financial assistance to encourage home ownership and at the same time, reduced the number of foreclosure properties that are becoming a hindrance towards achieving a full market recovery.
Industry experts said that foreclosure houses are pulling down home prices and values in neighborhoods and attracting vandals and criminals. Having them around, and in large volume, do not do the housing market any good because it destabilizes prices and values.
By helping prospective buyers purchase foreclosure houses, the federal government is promoting homeownership and at the same time addressing the problems created by the foreclosure crisis.
On the other hand, the city of Modesto is facing the possibility of losing nearly $8.1 million in repossession relief funds because it failed to find a way to effectively spend the money. The city’s Neighborhood Stabilization Program (NSP) is different compared with Stanislaus County which purchase foreclosure homes and place them back on the market for sale to first-time homebuyers.
With Modesto, they allow the buyers the initiative to find, purchase and repair their own foreclosure houses. In so doing, buyers would be able to obtain a loan for both down payments and repairs.
However, the city’s NSP program failed to live up to expectations as no homebuyer has successfully completed the requirements for the city’s down payment program. This resulted to the city still holding the $8.1 million NSP funds, with no record of ever helping a family purchase a house.
Officials involved in the community development project said that the process failed to produce the desired results and so were looking at potential ways to use the money. They said that a proposal will be presented before the Modesto City Council for organizations to use the federal funds to purchase foreclosure houses for resell or rentals.
Many city officials agreed that buying home foreclosures and placing them back on the market for sale is a productive use for the federal funds.
