California’s Renovation of Foreclosed Properties for Sale
October 2nd, 2009 by 
wsummers
City officials in Sacramento, California have decided to earmark federal stimulus funds to purchase foreclosed properties for sale. The capital-area project involves buying foreclosure properties and renovating them to make them assets in neighborhoods instead of blights.
The project has chosen the first foreclosed home that it plans to renovate. The property is a single-family home acquired for the city by Sacramento Housing and Redevelopment Agency (SHRA) as part of the Sacramento Property Recycling Program.
The program’s fund is part of the nearly $13.2 million that the city received from the federal initiative designed to help revitalize neighborhoods severely affected by the foreclosure problem. Industry experts said that if the city could renovate these foreclosure houses and attract people to buy them, then it would mean a big help to neighborhoods in the area.
Experts said that many foreclosed properties for sale have been abandoned and remained vacant for long periods of time that they become magnets for criminals and vandals.
The first house that the city has chosen to renovate was originally appraised for about $60,000. It was foreclosed by Wells Fargo Bank which in turn sold it to the SHRA for $38,000. The SHRA plans to start rehabilitating the foreclosed houses before the end of this year and to place it on the market for sale by early 2010.
Out of the $13.2 million federal funds, $3 million will be used by SHRA for the city’s Property Recycling Program. The SHRA has partnered with for-profits and non-profits to perform the needed repairs for the foreclosed houses purchased under the program.
The remaining amount on the federal stimulus funds will be used on programs that will provide mortgages to developers who rehabilitated troubled single-family and multi-family houses for rent to families with low income.
Officials at the SHRA are hoping to rehabilitate as many as 60 foreclosure houses using the $3 million federal funds. Proceeds from the home sales deals will be returned to the program to purchase additional foreclosure houses.
Meanwhile, the county of Sacramento received nearly $18.6 million in federal housing funds. The county also plans to spend a portion of the federal money to purchase and renovate foreclosed properties for sale through SHRA.
