Council Takes $1.2 Million for Purchases of Foreclosure

Posted on November 3rd, 2009 by saman

Council takes money to help Culpeper city to face foreclosure situation

It is official that the town will make use of federal funds of $1.2 million to buy homes within areas that were hit the hardest foreclosure.

The town council of Culpeper accepted the funds of neighborhood stabilization during its recent meeting, although the committee of finance voiced some serious concern on how this program would be used and whether it would need town funds. Overall, the vote stood at 7-1. There are no required town funds for buying real estate via this program.

Instead, the funds are going to come straight from the department of community and housing development of Virginia.

Within grant applications, the town staff pinpointed the Culpeper Meadows, Highpoint and Lakeview as neighborhoods with the top foreclosure rates. Hundreds of homes within these brand new subdivisions have all gone up within the decade.

Within the initial quarter of this year, Culpeper ended up ranking seventh within the state among the counties of Virginia that was hit the hardest by foreclosures. In the past year, 467 houses within Culpeper lost themselves to foreclosure. This would be comparable to the 180 within 2007 and the 33 within 2006.

Therefore, the town has hopes of helping, mainly with the use of federal dollars. The only money of the town spent for the program of neighborhood stabilization thus far amounted to $10,000 when it came to matching funds of the state for the processes of grant applications. Another $5,000 to around $8,000 within staff time will be spent on this program’s implementation.

It isn’t a subsidized program of housing; however, one that wishes to stabilize the values of home within areas where empty, foreclosed, blighted properties might just be pulling them down. The overall timeline in implementing this project would 18 months, if not throughout the end of the year 2010.

Local agents of real estate can partake in this program by introducing homes which met the requirements of the program. This means selling for one percent under the value of the market in any aforementioned subdivision. There is no reason why the local government has to be involved within real estate, though. In fact, every time the government gets involved, several concerns are raised.

However, the program does have value since it can improve how the neighborhoods look while offering opportunities for low and moderate income families to purchase homes.
There has been a debacle in the market of housing, which was partly caused by bankers of mortgage and other professionals of real estate. This could definitely be of help.

The project is oftentimes referred to as a very noble one; however, some are worried that it may tax the resources of the town. Additionally, a good amount of realtors aren’t happy with the program, although the reasons of this are unsure. It cannot be figured out. It might be because they could lose their entire commissions or because it involves the government. There might be a chance that this plan may be more harmful than great. However, a lot of people don’t seem to see that it could do anything worse compared to what banks of investment have done already.