Brokers dealing in distressed properties are not often a welcome sight. But Braintree-based Nationwide REO Brokers are working hard to make themselves an exception – at least for military families.
The group is launching a program to renovate hundreds of distressed properties nationwide and rent them out to military families, with an option to own. The “Welcome Home” program will be the first of its kind in the country. Both veterans and active military personnel are eligible.
“We have a program that we believe in, that we’ve developed over the past eight months, and I’m extremely excited about it,” Nationwide REO Brokers’ Presdient and CEO Nick Petrocelli told Banker & Tradesman.
Service personnel have been one of the groups most impacted by the housing downturn. There has been considerable media coverage of veterans facing or fighting foreclosure while deployed. But even for servicemen and women current on their mortgages, the impact of the housing crisis is still deeply felt.
Service members are generally redeployed every few years, and as the housing market has declined around the country, it has left many underwater and unable to sell their former homes.
“Anyone who was put on a base in ’07 or ’08 and now has to move – they do get a housing allowance, but they’re stuck in the property because they’re upside down,” Petrocelli explained.
Trying to deal with all the headaches of being a landlord from a thousand miles away – and sometimes overseas or in a war zone – is no picnic, and many military families have taken a big hit to their nest eggs. That can make a big difference when it comes time to transition to civilian life – and military families are already, on average, worse off financially than their peers in civilian life at the same age, because service pay is generally lower than the private sector.
“If you compare a veteran with a civilian counterpart, they’ve made a sacrifice for our country. Ten or 20 years down the road, they look very different, demographically, simply by virtue of their service,” said Barbara Mancovsky, REO division manager for Nationwide. “So I think there’s an opportunity for us to give back a little bit because we understand how to maximize the return on [these properties].”
Set Up For Success
The Welcome Home program, aims to address those issues, allowing families to move easily while still building equity. Petrocelli’s company will purchase and renovate the properties lease them to military families. The service member’s monthly payments will contribute toward a down payment fund, enabling them to purchase the house they’re living in after a few years, if they decide to do so. The fund will follow them as they move, so that a family stationed in Texas for a two years who then moves to North Carolina can transition into another of the program’s properties and maintain the equity they’ve built up.
Participants can also take the equity with them even if they exit the program.
The properties will be renovated to FHA standards, with additional green features to help improve their energy usage.
“We want to set these people up for success,” Petrocelli said, and making them energy efficient is “a must. We can’t sell somebody a home with an $800 gas bill.” The company also hopes to hire veteran-owned contracting firms to help renovate the properties.
Housing counseling will be provided by USA Cares, a provider of financial and advocacy assistance to post 9/11 active duty U.S. military service personnel, veterans and their families.
The group said it is still actively seeking banks and lenders to partner with.
“We need banks and lenders who have these distressed properties. They’re going to take a haircut anyways,” Petrocelli said. “Why not channel it to where I can do some good?”
