HUD EXPANDS NEIGHBORHOOD STABILIZATION PROGRAM IN CUYAHOGA COUNTY Deep discounts on HUD Homes to help Recovery Act program work more effectively in Cleveland metro area
WASHINGTON - The U.S. Department of Housing and Urban Development today announced an agreement with the Cuyahoga County Land Reutilization Corporation (CCLRC) to stabilize neighborhoods hard-hit by foreclosure in Cleveland and Cuyahoga County by selling foreclosed homes to the CCLRC for as little as $100. The agreement announced today follows a similar successful program launched in Cleveland in which HUD transferred 441 foreclosed properties to the City at deep discount in just over a year.
"We are committed to helping communities reverse the effects of neighborhood decline," said HUD Secretary, Shaun Donovan. "This agreement builds upon a variety of programs HUD offers municipalities to enable them to acquire HUD properties at a discount. Now that we have proven that these efforts work in Cleveland, we hope to do the same throughout Cuyahoga County. In addition, this discount sales program will leverage $41 million HUD awarded to the Cuyahoga County Land Reutilization Corporation through the Recovery Act's Neighborhood Stabilization Program. Through our coordinated efforts CCLRC has the financial capacity and flexibility to acquire properties not only from HUD but also from any real estate entity as well."
Senator Sherrod Brown said, "This is a victory for Cuyahoga County. As we work to rebuild our communities devastated by the housing crisis, it's critical that our efforts aren't undermined by out-of-state speculators. A local response to the housing crisis is in the best interest of Ohio communities and our nation's economic recovery."
Rep. Dennis J. Kucinich added, "I got on this in May as soon as I learned the program was in trouble. I'm glad to have worked with HUD to help reinstate it."
"This is a win for the people of my District," said Rep. Marcia L. Fudge. "I'm pleased to see HUD implement a program that will put the needs of neighborhoods first and keep foreclosed properties out of the hands of flippers and speculators who perpetuate the cycle of blight and neglect. I listened to city leaders and constituents and made it a priority to see this program through and I will continue to fight for the needs of our community."
"I am pleased that HUD has agreed to extend Cleveland's landmark REO agreement to the rest of Cuyahoga County," said Mayor Frank G. Jackson. "An agreement with CCLRC takes advantage of their expanded capacity to effectively acquire, hold and dispose of homes in a way that assures quality restoration and supports our neighborhood revitalization efforts."
Under HUD's agreement, the Department will sell hundreds of foreclosed properties in its inventory at deep discount to the CCLRC. In turn, local governments in the area can accelerate their neighborhood stabilization efforts, especially in areas with high concentrations of foreclosed and abandoned homes.
"We have had very positive discussions with HUD over the last few months. HUD has shown that it is keenly aware of the unique needs in our community, and we very pleased to partner with HUD to address our joint desire to improve neighborhoods in Cuyahoga County," said CCLRC President Gus Frangos.
"We will begin working closely with CCLRC on many levels. First, we will inform the Corporation of all our newly acquired properties and then provide initial inspections prior to a public listing. Then we will give CCLRC the exclusive opportunity to purchase these homes for as little at $100," explained Engram Lloyd, acting director of HUD's National Homeownership Center.
The discounted sales program being announced today in Cuyahoga County will run until September 30, 2011, at which time HUD and CCLRC will re-assess the success of the program. HUD will offer CCLRC an exclusive opportunity to purchase properties at significantly reduced prices, depending on the home's appraised value. For example:
Homes valued between $20,001 and $100,000 will be sold at a 30 percent discount for an initial five-day period. After 60 days, the homes will be sold at a 50 percent discount.
Homes worth up to $20,000 will be sold for $100.
Earlier this year, HUD awarded nearly $41 million in NSP2 funds to CCLRC, a consortium that also includes the City of Cleveland, Cuyahoga County, and the Cuyahoga Metropolitan Housing Authority. The funds will be used in targeted areas across 47 census tracts to acquire, rehabilitate, and resell 216 units of foreclosed or abandoned properties and to provide homebuyer loans (such as a soft second mortgage) for these homes and 150 additional homes. In addition, CCLRC plans to demolish 900 homes, deconstruct 95 units so that their components can be reused, and acquire 150 units to be secured and maintained for future purposes. Additionally, 134 rental units will receive developmental assistance specifically for households of 50 percent or less of area median income.
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.