Companies Are Buying Foreclosed Homes
Times are indeed tough for the US economy. Unemployment is at its peak and as people fail to make mortgage payments, their houses are being taken over by banks. Subsequently, foreclosures have common in some neighborhoods. The erstwhile owners are fleeing the foreclosed homes. Now the properties are up for sale.
Habitat for Humanity of Charlotte is one of the first to show an interest in buying foreclosed homes.
The organization says it is cheaper to buy an existing home than build one. A newspaper, The Charlotte Observer, says the foreclosure crisis in the industry has made it easier to buy and renovate homes than to build it. Meg Robertson, an associate director with Habitat, says that the company is buying a house for as cheap as $30,000 and renovating it with another $10,000. However, to build a new home, one has to spend over $60,000. So buying a foreclosure is definitely cheap – by almost $20,000 to $30,000.per home.
U.S. Department of Housing and Urban Development (HUD) has assured that all the costs will be reimbursed. The department has come up with a program to stabilize neighborhoods riddled by foreclosures. Foreclosure filings had reached a record high in Charlotte last year – nearly 8000 houses were foreclosed. Even this year, filings have gone up by 30 per cent. In many localities, houses built five years ago, are being boarded up.
Habitat will now start Neighborhood Revitalization Initiative in 11 such places. These houses will be renovated and palmed off to families that have a fixed salaried income. They will not have to make any down payment or pay any interest. The only condition is that they will have to voluntarily work for 250 hours for renovating the building they buy.
Linda Blum, the agency’s development director, says revitalization of neighborhoods will not be a permanent business for Habitat. The company is only ensuring that the donors’ dollars are spent in a judicious manner. The company is not merely taking advantage of the crumbling housing market. Linda also says that the company is not evicting anyone. People are not being thrown out. It is merely renovating homes that are empty.
Five homes have been bought from Grass Meadows, Windy Ridge and Barrington sub-divisions. Charlotte will be given $5.4 million in the next one-and-a-half years. The amount will be given to various partnership companies that include Charlotte’s Habitat amongst others. These companies will buy and renovate around 110 homes.
