City, county target abandoned, foreclosed homes
Lakewood and Jeffco plan to use HUD funds to rehab neighborhood eyesores.
LAKEWOOD – A handful of vacant houses in an older, established neighborhood would be purchased, fixed up and sold at discount as part of a federally funded program to soften the neighborhood damage caused by abandoned or foreclosed homes.
The money is part of the $3.92 billion Neighborhood Stabilization Program managed by the U.S. Department of Housing and Urban Development.
Jefferson County’s share, just more than $6 million, will be split among Lakewood, Arvada, Golden and Wheat Ridge.
The county applied for $15 million of the program’s funds and originally planned to use part of the money in unincorporated Jefferson County. But the cut to $6 million means those areas will wait until the HUD program offers another round of funding, said Jacqui Picket, Jeffco’s director of Community Development.
Lakewood’s cut, about $1.5 million will be used to purchase and rehab at least six vacant, foreclosed properties in east central Lakewood, said Amy DeKnikker, an associate city planner who also is administrator of the city’s Community Development Block Grant program.
The city is looking for a non-profit partner to acquire and rehabilitate vacant houses that are in some stage of the foreclosure process and those with already-foreclosed titles.
“Our goal, at minimum, is six houses. It certainly depends (on cost), but we hope to do more,” she said. “These funds are specifically for those homes that have already gone into foreclosure so we can get folks back in there.”
To meet program requirements, the houses will be discounted at least 5 percent under current appraised market value, rehabbed, then sold to low and middle-income occupants.
“It is workforce type housing, regular folks,” said DeKnikker.
Financing avenues are yet to be mapped out, but should be determined once the city has found a non-profit partner.
HUD regulations limit the qualifying homebuyers based on the median income in the area. To qualify for the Lakewood program, prospective buyers can make no than 120 percent of the area median. For a family of four, the 2009 cap would be $91.200 a year; for a family of three, $82,100; a qualifying couple can make no more than $72,950; and the single-person limit is $63,850.
The units will be sold for no more than it cost to acquire and rehab them. The program also requires that 25 percent of the funds be used to house people whose income is no more than 50 percent of the area’s median income, which would be $38,000 for a family of four and $30,400 for a two-person household.
To weed out speculators looking for a bargain, the program curbs resale of the houses by prohibiting profit from resale for a yet-to-be determined time. If a home is resold before the limit expires, the profit will reclaimed by the program, Picket said.
And the groups that acquire and fix up the homes should expect no windfall profits.
A Jeffco Community Development Notice of Funding Availability warns: “NSP is not necessarily a big money-making opportunity. In fact, some of the federal restrictions may make your job as a vendor somewhat difficult.”
The big payoff is for neighborhoods and communities. By turning vacant houses into affordable homes, neighborhoods are more secure and property values are at less risk, Picket said.
Wheat Ridge and Arvada also plan to rehab about a half-dozen single-family houses through the program and Golden wants to fund a multi-family complex of garden flats.
“By acquiring single-family units in a concentrated area we are removing any potential form of blight and we are improving the integrity of the units and therefore the integrity of the community,” Pickett said. “And we are offering affordable home ownership. If a homeowner purchases at an affordable rate, they are more likely to stay in that unit long-term.”
In Lakewood’s case, the targeted neighborhoods are between Wadsworth and Sheridan boulevards, and between West Mississippi and West Jewell avenues. Most of the area is in the Greenbrier-Cloverdale neighborhood.
The area, DeKnikker said, was selected because it has experienced a high rate of foreclosures.
“It’s an area that we don’t anticipate is going to have any future redevelopment, so we feel it’s on the verge of kind of deteriorating quickly,” she said.
The funding should be in place and the program under way in a couple of months.
“Hopefully, we’ll have something in place by the summer, but the details, at this point, are still really pending on a lot of different things,” DeKnikker said.
