Successful Programs Put Buyers into Foreclosed Homes
Forgivable-loan programs aimed at helping lower-income home buyers have put nearly 200 participants into foreclosed houses in Minneapolis and Brooklyn Center. Both cities have offered up to $10,000 for closing or down payment costs to eligible participants who buy foreclosed homes. The interest-free loans are forgiven if the buyer lives in the home for five years.
In Minneapolis, 147 participants have bought homes this year in foreclosure-ridden neighborhoods, mostly in the north, northeast and south-central parts of the city, said Cheris Shoquist, city foreclosure project coordinator.
About 50 others have bought foreclosed homes across Brooklyn Center since that city's program began in March, said Gary Eitel, community development director.
The Brooklyn Center City Council has been updated on the program and has decided to continue it. It gets its funding from $1 million in new taxes generated by a commercial tax increment financing district.
Minneapolis allocated an additional $500,000 to its program after the first $500,000 was snapped up last year by 50 home buyers. At that time, the program had no income limits, but the second installment allows buyers to have up to 120% of the metro-area median household income of $81,000. The city added another $1.5 million to the program from a grant from the Federal Home Loan Bank.
Brooklyn Center limits its ReNew Loan program to lower-income, first-time buyers. The ReNew Loan program provides up to $10,000 to each eligible buyer for closing fees or down payments on vacant homes that the seller has registered with the city. Single buyers or couples can have up to the metro median household income; families of three or more can have up to 115% of the median income.
Buyers also may be eligible for up to $8,000 per home from the Pohlad Family Foundation.