The US Department of Housing and Urban Development (HUD) and the Cuyahoga County Land Reutilization Corp. (CCLRC), reached an agreement for the Ohio land bank to acquire HUD foreclosed properties for as little as $100.
CCLRC, created through state legislation in April 2009, acquires foreclosed properties held by banks, government-sponsored enterprises (GSEs), and federal or state agencies. In addition to the steep discounts for foreclosed properties, HUD awarded CCLRC $41m through the Neighborhood Stabilization Program (NSP) so that it can acquire properties not just from HUD but other real estate companies as well.
The program follows a similar one launched in Cleveland, through which HUD transferred 441 foreclosed properties to the city at a discount. Cleveland is located in Cuyahoga County.
“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.”
Engram Lloyd, acting director of the HUD National Homeownership Center, said HUD will work with CCLRC to provide initial inspections before the properties are ready for public listing. Then, the CCLRC will have the opportunity to buy the homes for as little as $100.
The program will run until Sept. 30, 2011, when HUD and the CCLRC will examine how the program is doing.
Homes valued between $20,001 and $100,000 will be sold at a 30% discount for the first five days. After 60 days, they will be sold for a 50% discount. Homes worth less than $20,000 will be sold for $100.