The U.S. Department of Housing and Urban Development recently announced an agreement with the Cuyahoga County Land Reutilization Corporation (CCLRC) to stabilize neighborhoods hard-hit by foreclosure in Cleveland and other cities in Cuyahoga County by selling foreclosed homes to the CCLRC for as little as $100.
The agreement follows a similar successful program launched in Cleveland where HUD transferred 441 foreclosed properties to the City at deep discount in a little more than a year’s time.
The discounted sales program in Cuyahoga County will run until Sept. 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.
“This is a victory for Cuyahoga County,” said Senator Sherrod Brown, who helped facilitate communication between the county and the federal government and urged HUD to reinstate the program to the CCLRC.
“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,” Brown said.
Under the original program, HUD gave the city or nonprofits the initial offer to buy homes valued at $20,000 or less for $100. The program resulted in the sale of approximately 440 properties.
Half of the homes went to community development groups or others for rehab and the city slated more than a third for demolition. CCLRC acquired more than 50 homes.
The expanded program will offer exclusive, county-wide purchasing rights to CCLRC. Homes will be sold at a discount, depending on the home’s value. 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 and homes worth up to $20,000 will be sold for $100.
Working with area mayors through the First Suburbs Consortium, Congresswoman Marcia L. Fudge (OH-11) began advocating for the program’s expansion in early 2009. “Our kids deserve better than abandoned buildings and our communities should be free from blight. It’s both a safety and a beautification issue,” said Fudge. “The Land Bank’s agreement will help community leaders address these issues to restore our neighborhoods. I’m pleased HUD’s program puts our neighborhoods first and keeps foreclosed properties out of the hands of flippers and speculators who perpetuate the cycle of urban decay and neglect.”
Representative 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.”
In a written statement Mayor Frank Jackson said “I am pleased that HUD has agreed to extend Cleveland’s landmark REO agreement to the rest of Cuyahoga County. 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.”
“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 the $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.”