Boston Mayor Thomas Menino is set to announce a new $17.6 million foreclosure stabilization program that aims to both keep distressed homeowners in their homes and help new homebuyers purchase foreclosed property across the city.
The program, called the Homeownership Stabilization Campaign, will run for one year. During that period, Boston will provide residents with zero interest home equity loans.
Evelyn Friedman, director of the city’s Department of Neighborhood Development (DND), said Menino was particularly concerned that tightening credit was preventing residents from making crucial repairs to their homes, like replacing roofs or water heaters.
"The mayor is very concerned about what was happening to folks who have lost equity in their home," Friedman told Banker & Tradesman.
The city, through the Boston Redevelopment Authority, has been acquiring blighted properties in need of serious rehabilitation.
It will also provide those buying properties with low to moderate damage with money for closing costs, rehab loans, and homebuyer counseling.
For houses in need of much more work, community developers and non-profits can apply for fix-up funding, make improvements, and re-sell to owners who will occupy the home.
"It’s a whole campaign to bring these forsaken and abandoned properties back on the market as quickly as possible," Friedman said. "We’re looking forward to getting more money out to the neighborhoods."
The $18 million initiative, a more than 200 percent increase in homeownership funding according to the DND, was made possible by $8.23 million in federal Neighborhood Stabilization Program (NSP) funding. Partnerships with state agencies and refocused funding from the city’s previous foreclosure abatement efforts also helped make the program a reality.
The city has submitted an application to the Department of Housing and Urban Development (HUD) for an additional $39 million in the second round of NSP funding that would extend the homeownership campaign.
The formal announcement of the program is expected to come this afternoon at 2997 Washington St. in Roxbury, in front of a formerly-foreclosed home bought by a resident with help from the city of Boston.
"This is a significant investment to keep our neighborhoods strong," Menino said in prepared remarks obtained by Banker & Tradesman. "Just like other cities across this country, the foreclosure crisis has had an impact on our communities. Thanks to our partners who are working with us to get Boston’s housing market back on track, we’ll provide the extra support that folks need to keep affordable housing strong in our neighborhoods, and the access to valuable resources that people need in this tough lending market."
