Houston, Harris Co. making plans to buy foreclosures

Houston Foreclosure News

Article Abstract: With the latest legislation and grants given to local governments to someone help the growing Texas foreclosure problem, Houston will be purchasing and renovating foreclosed homes through a local government initiative. Unfortunately for first-time homebuyers and investors, the government may be unintentionally sweeping up great deals provided by the Texas foreclosure market. Cities such as Fort Worth are handing down the grants to public levels to assist first -time homebuyers purchase the foreclosed homes and are even providing financial assistance for urgent repairs the homes may need. For the entire Houston foreclosure article, please continue reading below:
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By LIZ AUSTIN PETERSON

Houston and Harris County soon could begin buying and renovating foreclosed homes and selling them to low- and middle-income families, using $28 million in federal grants aimed at tackling the subprime mortgage crisis.

They are among five counties and nine cities in Texas eligible for a piece of nearly $4 billion in grant money Congress allocated this summer for the redevelopment of foreclosed properties in its housing bailout bill.

The state of Texas is set to receive nearly $102 million, which it plans to distribute to the counties most affected by the housing meltdown. Harris County could receive an additional $2.8 million if the state's preliminary plan is adopted.

Applications for the grants are due Dec. 1. The city, county and state still are taking public comment on their plans, which remain in the early stages of development. None of the jurisdictions have received final approval to submit applications.

President Bush briefly threatened to veto the housing bill, in part because he believed the provision allowing local governments to buy and rehabilitate foreclosed properties would benefit lenders and not homeowners.

But Houston Councilwoman Sue Lovell called the grant program a great opportunity for the city.

Unlike other programs that restrict assistance to the neediest families, this program will allow participants to make up to 120 percent of the local median income. In Harris County, that means families of four with an income of up to $73,300 would qualify.

"The key to having stable neighborhoods is to really have people that own their own homes," Lovell said Thursday. "This really opens up a whole different group of people we'll be able to assist buying homes."

Local governments can use their grant funds in a variety of ways, such as buying foreclosed homes from lenders and selling them back to their owners for an affordable amount, or buying foreclosed apartment buildings and then renovating and renting the units to low-income senior citizens.

The city plans to use its $13.5 million grant in two ways, said Paulette Wagner, a division manager for planning in Houston's Housing and Community Development Department. Some money would be used to buy and demolish abandoned, foreclosed homes. The land then would be sold to builders who would construct affordable homes and sell them to eligible buyers. The city also plans to find a nonprofit housing group to coordinate the purchase and renovation of abandoned, foreclosed homes for sale to eligible families.

David Turkel, director of the Harris County Community Services Department, said his staff still is trying to decide the best way to spend the county's $14.8 million allocation.

"It's a real challenge, it's very exciting and it gives us an opportunity of coming up with some real creative concepts in addressing the problem of home foreclosures," he said.

 

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