Colorado is among the US states with high volume of foreclosed properties. In the state, Denver logically has most of the foreclosures. Local housing data indicates that the number of Denver foreclosure properties rose from just 0.8% in 2000 to 5.9% in 2007. As the economic downturn continues and the unemployment rate increases, it is expected the rate of foreclosure in the city would continue to climb. Thus, as the federal government's Neighborhood Stabilization Program rolls out, Denver is among the cities of priority.
The federal government through NSP is allocating about $34 million in helping curtail rising foreclosures in Colorado. Of the amount, $6.1 million would be allocated for Denver foreclosure properties. The funding would be spent on purchasing and redeveloping foreclosed properties in the city. Specifically, $3.8 million would be designated for buying and rehabilitation of foreclosed homes; $1.6 million would be used for land banking; $1.36 would be set aside for contingencies and $606,000 would be allocated for administrative costs.
The city's Office of Economic Development authority will have the full jurisdiction in allocating and controlling the funds. Initially, the government investment would target the neighborhoods where Denver foreclosure properties are at the highest: Montbello, Westwood and Green Valley Ranch. There will also be funds allocated to foreclosures in Villa Park, Athmar Park, West Colfax, Barnum and Mar Lee.
Through the investment, the rate of Denver foreclosure properties would be curtailed. Instead of selling the repossessed homes to prospective home buyers and home investors, the fund would acquire the homes, rehabilitate them and try to sell them back to original owners when the economic crisis eases and homeowners recover from slump. This may be a streak of bad news for practical and opportunistic home buyers, but the impact is yet to be felt in the coming months. In the meantime, there are still numerous available Denver foreclosure properties at marked down price tags.
