The GUARDIAN got this query from a reader over the weekend and followed with an “official response” from an councilor.
“Is the Boise Guradian aware of the City of Boise purchasing residential houses? I
understand the plan is to fix, repair and update these houses and then sell them.
If they cannot sell them, then I guess the city will become landlords and rent them.”
Here is the explanation–which begs questions of appraisals, who actually benefits (banks and mortgage companies??) and who ultimately pays for deals gone wrong. Also it looks like the city is in direct competition with existing landlords.
“I have spoken with officials in Boise…
This is for the City’s Neighborhood Stabilization Program (NSP). We are a sub-grantee to the Idaho Housing and Finance Association. NSP funds come through HUD and are one of the earlier Stimulus programs actually enacted during the last part of the Bush Administration.
These funds are used to purchase vacant foreclosed homes, make any necessary repairs, and then re-sell them to new homeowners. There are income guidelines for the new owners which are essentially low and moderate income, or workforce housing income levels.
Our program has been doing our best to identify vacant properties that are having a negative impact in their neighborhoods and use this grant as a way of “re-investing” in those areas while providing affordable and workforce housing for families.
Banks sell to us at a minimal discount by regulation (1% or 2% below appraisal), but our city staff has been successful at usually getting much deeper discounts sometimes in the 20% range. For this reason, we feel we can offer these homes at a competitive price point in today’s market. We are also working on creating other incentives similar to our regular homebuyer loan program that can help with down payment and closing costs. It is a great program!
It is true however, that we can choose not to sell, and manage the property as a rental. We have actually offered on a foreclose duplex for this reason. We need to have more affordable units in town that can handle larger families due to our position as a Resettlement Community by the State Department.”
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