Boston Announces $4M in Available Funds to Support Redevelopment of Foreclosed Properties
Mayor Says Neighborhood Stabilization Program Resources Designed to Expedite the Restoration of Valuable Housing Stock
March 23, 2009 – (RealEstateRama) — Mayor Thomas M. Menino today announced the availability of more than $4 million in Neighborhood Stabilization Program (NSP) funds for the acquisition and rehabilitation of foreclosed and abandoned properties by non-profit and for profit developers, the latest milestone in Boston’s efforts to stabilize those neighborhoods that have been disproportionately affected by foreclosures. Last month, Mayor Menino announced that Boston’s foreclosure efforts would benefit from upwards of $8 million in combined federal and state resources made possible by the “Housing and Economic Recovery Act of 2008,” of which the new development funds are a result. These targeted funds, he said today, are designed to create new homeownership and rental housing throughout the City.
“We’re making development funds available to support continued acquisition and rehab of foreclosed homes by local developers so that these derelict properties can be returned to productive use,” said Mayor Menino. “We want to support our existing partners in the non-profit and for-profit communities — and encourage new ones to work with us — to help restore the fabric of our neighborhoods and further stabilize home values. These funds will also help to create much-needed jobs in the construction industry.”
Mayor Menino said the funds, to be distributed by the City’s Department of Neighborhood Development (DND) Neighborhood Housing Development division, are designed to assist developers with the cost of rehabilitating vacant REO properties for three specific target uses: owner-occupied homes, rental properties for low and moderate-income renters, or supportive housing for homeless families. In addition, the Boston Housing Authority (BHA), in conjunction with DND, has made available up to 100 Project-Based Section 8 Vouchers over a 2-year period for homeless or formerly homeless households for NSP development projects that meet funding requirements.
In an effort to maximize available resources and encourage sustainable housing development, participating developers may also be eligible for additional Lead Hazard funding, funds from the City’s Green Affordable Housing Program, or Federal stimulus funding for energy conservation improvements.
The development funding is part of the City’s ongoing efforts to restore those communities hardest hit by the foreclosure crisis of the last year and a half. While Boston has not been as badly affected as some other cities across the nation, there are currently some 985 Real Estate Owned (REO) homes in Boston (properties that were bought back by the lender at the foreclosure auction and have not resold in the open market).
In late February, the City hosted a Homebuyer Fair at which close to 550 potential homebuyers were able to view listings of foreclosed properties, meet with mortgage lenders, and talk with non-profit housing councilors. Attendees also learned about a new down payment assistance program that has been made possible by NSP funds, through which qualified purchasers of foreclosed properties in a designated area of Boston can receive up to $25,000 at the time of purchase.
In addition to enabling increased down payment assistance, the City’s remaining $4 million in NSP funds will allow for the provision of technical and rehabilitation assistance to new homeowners of foreclosed properties, as well as support the renovation of properties acquired directly by the City through the Foreclosure Intervention Team (FIT), among other activities.
Department of Neighborhood Development Director Evelyn Friedman said funding is designed for those foreclosed properties that require minor or moderate rehabilitation as opposed to ‘gut rehab.’ Among other eligibility criteria for NSP development funding, priority will be given to those projects that are located within the specified NSP target area, which includes parts of Roxbury, Dorchester, Mattapan, Hyde Park, and East Boston; properties must have been acquired on or after September 29, 2008, and at time of application, properties owned by the developer must be current in bills involving the City’s Water and Sewer Commission and the Tax Title Department, and must not have outstanding violations with the Inspectional Services Department and Fair Housing Commission. Furthermore, the developer must be current in all loans with DND.
Friedman said applications for the development funding would available starting on March 30, 2009, at the DND Bid Counter, 10th Floor, 26 Court Street or by visiting the City’s website at www.cityofboston.gov/dnd. Applications will be accepted on a rolling admission basis. Review will begin upon application receipt, and funding commitments could be made within one month of the start of review.
An applicant conference has been scheduled for Tuesday April 7, 2009 at 10:00 A.M. in the Winter Chambers, 1st Floor, 26 Court Street, Boston.
