The US Department of Housing and Urban Development's Neighborhood Stabilization Program is earmarking about $11 million worth of funds as aid to Fresno foreclosure homes. The rescue package, just like in other cities and states, would be aimed at controlling and curtailing the rising volume of foreclosed homes in the Californian city. The entire county of Fresno, outside the city, is getting $7 million additional funds. The amount will be used in buying and rehabilitating foreclosed homes in the area. Up to 285 foreclosures are expected to be covered. Moreover, the fund will be self-serving and would rotate so that more foreclosed homes in Fresno would be bought in the future.
Fresno city council admits $11 million is just a fraction of the actual amount of money needed to fully cover foreclosures in the city. Within 18 months, the fund will buy foreclosed homes, renovate them and sell them to prospective buyers or to homeowners themselves at about 15% marked down price tags. Proceeds from sales would then be accumulated and used to acquire more foreclosed homes.
Fresno is targeting middle- to low-income households for the initiative. At the same time, the city would ask mortgage lenders within its territory to extend the foreclosure duration so that more homeowners would be given more time to prevent total foreclosures of homes. The efforts are expected to yield initial results at least before the end of 2008.
In October 2008, more than 600 Fresno foreclosed homes were sold. So far this year, about 2,000 units of such homes have already been sold. The figure is significantly higher compared to the 300 Fresno foreclosed homes sold and purchased in the entire 2007. Thus, city and county authorities are somehow worried about the robust increase in foreclosures. Homebuyers and home investors are up for a buying spree as prices go down amid piling up inventories.
