Mayor Menino Announces Boston’s $18M Homeownership Stabilization Initiative
July 29, 2009 – (RealEstateRama) — Mayor Thomas M. Menino today announced the City’s new Homeownership Stabilization Campaign, a comprehensive 12-month initiative through which the City has committed to spend as much as $18 million to help Boston’s neighborhoods recoup from the nationwide foreclosure crisis. Joined by state and local housing officials, Mayor Menino described the campaign as having a two-part strategy to help retain and support existing homeowners while adding new buyers to the market through bolstered homeownership programs.
The Department of Neighborhood Development (DND), which has been tracking foreclosure data since the late 1990s, says since 2007, close to 700 homeowners who have worked with the Boston Home Center (BHC) have been able to avoid foreclosure.
“This is a significant investment to keep our neighborhoods strong. Just like other cities across this country, the foreclosure crisis has had an impact on our communities,” said Mayor Menino, standing in front of a formerly foreclosed home in Roxbury that was recently purchased by a resident with the help of City-administered funds. “Thanks to our partners who are working with us to get Boston’s housing market back on track, we’ll provide the extra support that folks need to keep affordable housing strong in our neighborhoods, and the access to valuable resources that people need in this tough lending market.”
DND Director Evelyn Friedman explained that, while home prices are more affordable, credit is tighter than it has been in recent years, making it more difficult to buy or sell a home. Some homeowners in those neighborhoods that have been hit hardest by foreclosure have seen the value of their home depreciate, making it difficult to finance critical home repairs. In light of these issues, the homeownership campaign has two key strategies:
1. Protect existing homeowners that need to finance home repairs but cannot access home equity loans because values have declined in the current market. The City will provide equity loans to homeowners who could otherwise not otherwise finance repairs.
2. Stabilize prices in the housing market, especially in high foreclosure areas by assisting new homebuyers to purchase available property and take advantage of significantly reduced house prices.
The nearly $18 million ‘campaign’ is more than a 200% increase over previous year’s homeownership budgets, reflective of $8.23 million in state and federal Neighborhood Stabilization Program (NSP) funds which Boston received to assist in foreclosure relief efforts. In addition, the City has submitted an application to the Department of Housing and Urban Development’s (HUD) for an additional $39 million in competitive Neighborhood Stabilization Program 2 (NSP-2) funding that would extend the homeownership campaign. HUD is expected to announce NSP-2 funding awards in the fall.
Among other things, Menino said the overarching goal of the initiative is to support responsible redevelopment of foreclosed homes, of which Boston has approximately 928 scattered primarily in the neighborhoods of East Boston, Dorchester, Hyde Park, Mattapan, and Roxbury. The City’s Foreclosure Intervention Team (FIT), made up of representatives from nearly a dozen City agencies and departments, has overseen the direct acquisition of 12 properties so far and is in the process of negotiating the purchase of nearly 90 others from banks.
Friedman said roughly $11.6 million of the budget will assist residents in renovating those properties acquired by the City; provide technical and rehabilitation assistance to new homeowners of foreclosed properties, help homebuyers of foreclosed properties with downpayment assistance; provide differed home equity loans to homeowners, and also provide subsidies for private and non-profit developers to rehab foreclosed homes into homeownership, rental, or supportive housing. The initiative also includes $6 million for existing homeownership programs that focus on senior homeowner repair assistance, homebuying education, and lead paint abatement.
The BHC, one of four program divisions of DND, provides homebuyers with educational courses and financial assistance, and markets homes developed for income-eligible, first-time homebuyers. The division also assists homeowners with education and foreclosure prevention counseling, and encourages strong, stable neighborhoods by providing residents with financing and technical assistance to maintain and improve their homes.
For more information about the City’s Homeownership Stabilization Campaign programs, residents may visit www.bostonhomecenter.com or call 617.635.HOME.
Contact: Lucy Warsh
