Massachusetts is making a bid to stabilize the hardest hit neighborhoods in the housing crisis by giving homebuyers up to $40,000 to rehab foreclosed homes.
The state’s Department of Housing and Community Development (DHCD) is set to announce a two-tiered program to make purchasing foreclosed or abandoned homes more attractive in the 39 communities hardest hit by foreclosures. DHCD will collaborate with Mass Housing and the Massachusetts Housing Partnership (MHP) to administer the programs.
The first tier will be a soft-second mortgage program with increased eligibility for buyers of REO properties in those 39 cities and towns. The second tier includes the rehab funds for homebuyers in the 19 municipalities with the most dire foreclosure problems. The program will give up to $20,000 for condo or single-family home purchasers, and $40,000 for multi-family home buyers, according to Clark Ziegler, executive director of MHP.
"What we’re seeing is that many properties that are post-foreclosure are tired properties that need some work and need some money to try to get a homebuyer comfortable with buying them," Ziegler said. "The strong motivation here is neighborhood stabilization."
"[The second tier] is purely for folks who want to buy a property, rehab it and live in it, not investors," Ziegler said. "In some cases, these are two- or three-family properties, so there will be an opportunity to get some rental income there as well."
The plans are scheduled to be announced Friday morning at a seminar in Marlborough sponsored by the Mass. Mortgage Bankers Assoc. and the Mass. Bankers Assoc.
