Cleveland is One of Six Ohio Cities Designated for Expanded Neighborhood Stabilization Initiative. Qualified Nonprofit Groups Could Get Discounts on Foreclosed, Vacant Homes.
WASHINGTON, D.C. – November 11, 2015 – (RealEstateRama) — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – today announced that Cleveland has been selected for an expanded federal initiative designed to help repair communities hit hardest by the housing crisis. Cleveland is one of six Ohio cities and 18 metropolitan areas nationwide designated for the program.
Starting on December 1, local community organizations and nonprofits in these areas will be given the opportunity to review and purchase, often at a discount, foreclosed homes owned by Fannie Mae or Freddie Mac before the properties are listed for sale publicly. Sale prices will differ from market to market.
Local land banks will also have an opportunity to obtain distressed properties for demolition and blight removal under the program. Fannie Mae and Freddie Mac may also make a contribution toward the demolition of certain properties, based on market costs.
“Today’s announcement is a boost for Ohio communities that bore the brunt of the housing crisis,” Brown said. “This initiative will help give local communities and residents more power to rebuild their neighborhoods and eliminate blight as they continue to recover from the crisis.”
The announcement marks the expansion of the Neighborhood Stabilization Initiative, which was jointly developed by the Federal Housing Finance Agency (FHFA), Fannie Mae, Freddie Mac, and the National Community Stabilization Trust. The pilot program, first launched in Detroit, MI, in May 2014, was extended earlier this year to Cook County, IL. In addition to helping stabilize neighborhoods, the initiative is also intended to reduce the inventory of foreclosed real-estate owned (REO) properties held by Fannie Mae and Freddie Mac. Click here for a fact sheet on the Neighborhood Stabilization Initiative’s expansion.
“The number of REO properties that Fannie Mae and Freddie Mac hold continues to decline nationwide, but there are still some communities in which the number of REO properties remains elevated,” said FHFA Director Melvin L. Watt. “Our goal is to take what we learned in Detroit and Chicago and apply it to these additional communities as quickly and efficiently as possible. Giving local community buyers an exclusive opportunity to purchase these properties at a discount, taking into account expenses saved through a quicker sale, is an effective way to give control back to local communities and residents who have a vested interest in stabilizing their neighborhoods.”
The markets that were selected for the initiative’s expansion are Metropolitan Statistical Areas in which Fannie Mae and Freddie Mac each had at least 100 real estate owned properties valued at less than $75,000. The selected Ohio markets include Akron, Cincinnati, Cleveland-Elyria, Columbus, Dayton, and Toledo. Nationwide, the following areas have been designated for the initiative:
Atlanta-Sandy Springs-Roswell, GA
Miami-Fort Lauderdale-West Palm Beach, FL
New York-Newark-Jersey City, NY-NJ-PA
St. Louis, MO
Tampa-St. Petersburg-Clearwater, FL
In Congress, Brown has fought to protect funding awarded to Ohio to help communities devastated by the foreclosure crisis. Following Brown’s urging in July, Senate leaders backed off their attempt to raid millions of dollars from the Hardest Hit Fund, a federal program established to help homeowners avoid foreclosure and later extended to clean up blighted neighborhoods, to help pay for a new highway bill.
When the U.S. Treasury left Ohio off of the list of states eligible to receive Hardest Hit funds for foreclosure-affected communities in 2010, Brown appealed to President Obama and then-Treasury Secretary Geithner to dedicate additional funds for this program. As a result, the program was expanded and Ohio has received more than $570 million to address the state’s housing needs. In 2013, after a push from Brown, the Department of the Treasury approved the Ohio Housing Finance Agency’s proposal to use a portion of the state’s remaining HHF funds to demolish vacant and abandoned properties.
Meghan Dubyak / Greg Vadala