Stamford Hoping To Get Funds to Purchase Foreclosed Houses

Stamford is hoping to get funds to purchase foreclosed houses – this being part of federal programme aimed at containing foreclosures. Early next year it expects to receive over $2.9 million for buying, refurbishing and selling foreclosed units as affordable houses. The federal government has granted $25 million in the first weeks of October – it being an enforcement of the Housing and Economic Recovery Act.

The houses will be offered for sale to those who earn below 120% of the average income of the region. It calculates to $140,000 in lower Fairfield County according to HUD. The Governor M. Jodi Rell said that similar allocations have been proposed for the seven cities of Bridgeport, New Haven, Waterbury, Stamford, Meriden, New Britain and Hartford. He said, “Seven of our urban centers account for more than 25% of Connecticut’s foreclosures and pre-foreclosure actions. These funds will have a lasting positive impact in these communities, as they will ensure up to 400 units of housing will be acquired for rehabilitation and redevelopment rather than sitting empty and idle.” Rell must submit the submission for final approval and allocation by 1st December. This will be preceded by fifteen-day period of allowing for public comments.

The director of Stamford Community Development Office, Tim Beeble said that he had been informed. Since October his office had been going around inspecting 75 houses in the city that were known to be owned by the banks. About the suggested allocation Beeble commented that it was beyond his expectations.

HUD’s prescription was that the grants for the states be divided as per their needs. Stamford is not one of the cities with the highest concentration of foreclosures and as such it could have been that it would not have been granted anything. But the contrary happened. It will receive the fourth highest grant among the seven selected cities. Bridgeport got the lion’s share with $6 million. New Britain came last on the list with $1.8 million.

The state will be holding talks with the banks for the purchase of the foreclosed units. Beeble added that the assistance of local non-profit organizations would be taken because of their experience in this field of buying up and reselling houses as affordable units.

The plan is not without pitfalls because in the present mood of the market when houses are not selling. It might tempt banks to push houses into foreclosure so that these get sold.