$38M to Turn Tide of Foreclosure in Minnesota

Posted on April 29th, 2009 by saman

The bail-out will be utilized to help homeowners all over the country who are having difficulty in keeping their homes intact.

In the news, an ancient Frogtown house that has stood for 100 years was used a background for state and locals officials as they reveal that there is a US $38 million budget that will be used in supporting the households in Minnesota who are struggling in the face of the foreclosure crisis.

It is estimated that the US $38 million budget will be able to alleviate the number of homes that are foreclosed in St. Paul by around 5%. On top of this, the budget will be used to fix more than 150 houses in Minneapolis. This also aims to create jobs (pegged at 250) along with other projects of smaller communities that are of the same nature! This is according to the Minnesota Housing Finance Agency commisioner Dan Bartholomay.

This budget was approved by Congress last year as part of the Neighborhood Stabilization Program which is around $3.9 billion. The Minnesota Housing Finance Agency was the one who cascaded this. Major purpose of this is to support the households by giving at least $27 million to finance the metro governments while the $11 million will go to the outstate communities so they can purchase properties, or revive buildings. Lastly, the funds are expected to give financial aid to home owners who were faced with foreclosure.

There would be 21 beneficiaries of the budget throughout the state, the $8.4 million which is the largest portion will be given to Minneapolis. The budget is expected to give a strength to the city to buy the 80 properties that were foreclosed and to renovate another 80 properties according to the city officials.

The second biggest part of the pie, $6.3 million shall go to St. Paul which will help the city to buy 80-100 properties that are up for devastation and renovation.

Lastly, Washington County Housing and Redevelopment Authority will get the smallest portion at $1.6 million which they can use to purchase the 20 foreclosed homes in the area of Cottage Grove, 10 houses and 12-unit apartment building situated in Oakdale.

A Widespread Problem

Foreclosure are not only evident in Minnesota but in other states as well. There were various efforts being made to address the crisis.

According to Senator Linda Higgins, the task shouldn’t be the responsibility of one group alone but of the whole nation.

The highest incidents of foreclosure in 2008 were recorded at the counties of Hennepin and Ramsey tipping at 7,300 and 3,000 foreclosure incidents. Followed by Dakota at 2,000 while Anoka County registered a 2,200. St. Louis County has 476 foreclosures while Steans County has a record of 422 andf Olmstead County with 403 foreclosures.

In St. Paul where most of the foreclosure are residential there are around 2,000 properties facing foreclosure that have no inhabitants.

Problem is not only foreclosure but because it is in low income areas that’s why the funds are being channeled at this areas. The challenge is the limited funds because the allotted funds may not be able to solve the problem at hand.