Banks and HUD partner to help nonprofits and local governments
September 01, 2010
Major banks are partnering with the Department of Housing and Development to help out local governments and nonprofit fundraising groups by giving them preference over private investors.
The new "First Look" program will allow these groups to buy foreclosed homes before they are available for purchase by independent individuals, the Associated Press reports.
Congress will be helping out as well - it has earmarked $7 billion to help groups acquire these homes for remodeling or redevelopment projects.
In the past, properties have been snapped up by speculators with superior funds. "The fear is that they will purchase the property, make very minimal to no improvements on it, and either put it back on the market as a rental unit or let it sit waiting for the market to come back," Sarah Greenberg, senior manager for community stabilization at nonprofit housing group NeighborWorks America, told the source.
Banks such as Bank of America and Wells Fargo will be giving organizations 48 hours to evaluate homes and come to a decision.
Housing and Urban Development Secretary Shaun Donovan estimates that approximately 100,000 houses will be sold through the program.