Long Island to receive $19 million to Fight Foreclosures
Posted on October 23, 2008
Filed Under Foreclosures | Leave a Comment
Long Island will be receiving nineteen million dollars to purchase and repair empty foreclosed homes. This money is part of the four billion dollar initiative to help relieve the stress of foreclosures.
Nassau County will receive seven million dollars to fight foreclosures while Suffolk County will receive about five million dollars. Babylon and Islip also qualified for grants when the number of empty foreclosed home, the unemployment rate and the amount of subprime mortgages were taking into consideration.
HUD will funnel over one hundred million dollars into New York State since it is considered “low risk” when it comes to empty foreclosed homes.
The aid was approved as part of the recently approved housing act. The housing act set up the “Neighborhood Stabilization Program”. The funding is supposed to be used to help rescue the communities and neighborhoods that are most at risk, based on information such as census data, and mortgage groups. Houses that have been vacant for over thirty days were also a consideration.
The money is to be used to purchase land and property. The community can repair or demolish homes that have been abandoned.
Abandoned and boarded up houses is just one of the consequences of the mortgage mess. Leaders in local areas believe that the abandoned homes will undo the benefits of many years of investments that were made in order to improve life in neighborhoods. Officials in the real estate industry and community have stated that a mass of empty homes in a neighborhood can develop into bigger problems. These problems include dilapidated homes and mad home owners or thieves tearing out the pipes to sell.
For those communities who receive the foreclosure funds will have to spend the money within eighteen months because the federal government wants to solve these problems quickly. These funds may also be used to demolish dilapidated homes and can be used by the homeowner as a down payment or for help with home closing costs.
In August the median closing costs for homes was four hundred and twenty thousand dollars. This means that the funds may not go too far in other states, even if the cost of the foreclosure home is below average. .
Officials consider the three million dollar grant “seed money”. The homes will most likely be used to purchase fifteen houses for two hundred thousand dollars apiece. These homes will be rehabilitated in the coming year.
The homes can then be sold and the return will be at least what was paid for them. Then money can be put back into the program. The hope is that the grant money will lead to homes that are more affordable and the foreclosure homes can go to young couples.
Other fund allocations are as follows: Babylon Town will receive two million dollars, Islip Town will receive three million dollars, Nassau County will receive seven million dollars, Suffolk County will receive five million dollars and New York City will receive twenty four million dollars. The funds will hopefully begin to help assist with foreclosures and towns can begin rebuilding.
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