Habitat would manage rehabilitation of the properties - then match them to lower income families to buy. The state would pick up the tab out of federal stimulus funds.
The funds are part of a $90 million package the state received under the Housing and Economic Recovery Act of 2008, said Gordon Anderson, senior communications adviser for the Texas Department of Housing and Community Affairs.
“These dollars are geared toward stabilizing neighborhoods that have suffered from foreclosures or abandoned homes, and arrest the slide of declining property values to surrounding neighborhoods,” Anderson said.
If the parties sign the deal, about $1.1 million would be allocated to Bell County and about $630,000 to Coryell County, said Gene Bauer, executive director of the Fort Hood Area Habitat.
The exact amount is $1,747,712.
Bauer said he is waiting for the Department of Housing to send the contract for review.
“This is not an influx of funds for Habitat,” Bauer said. “We will act as an agent for the state. We won’t actually get any money.”
Bauer said his job would be to identify foreclosed properties in the area, fill out the paperwork to purchase them and take the completed packet to the Department of Housing.
“The state will close on the sale and actually take title to the property,” Bauer said. “We will manage it and arrange for repairs to be made. The state will reimburse us for the cost of repairs. Our job will be to identify a low-income family as purchaser and take them to the Department of Housing. The state will finance a 30-year, zero-interest mortgage for them to buy the property.”
Bauer said the program would leverage Habitat’s ability to get low-income families into homes they wouldn’t be able to buy otherwise.
“That’s why we want to get into this,” Bauer said. “Habitat doesn’t get any money for this, but it gives us another tool in our toolbox to eliminate poverty housing.”
The traditional mode for Habitat is to assist applicants from a client list to build a new home from the foundation up. After a family meets a list of requirements, they must then volunteer to help other families build their homes. Afterwards, they put sweat equity into building their own home with the help of volunteers.
Bauer said a group of angels contributes cash every year to a building fund to make Habitat’s program possible. When a house is complete, the family signs a mortgage with Habitat.
Bauer said with the foreclosed properties it would work a little differently.
“They will have to meet all the requirements of our program, which includes helping others build their homes,” Bauer said. “But if we match them to a foreclosed home they may not make the repairs. It will depend on the repair work. But probably not.”
Bauer said rather than use volunteers, Habitat will hire local contractors and subcontractors to help stimulate the local construction business.
“I can tell you there are long-time builders and subs in our community that have been doing business here for years but who can’t find work right now,” Bauer said.
“These are good guys and they are hurting.”
A lot of foreclosed homes will be available for the program. According to Foreclosure Listing Service of Addison, there has been a 22 percent jump in foreclosures in Bell County from 2008 to 2009.
The company lists 1,381 foreclosures in the first three quarters of 2008 and 1,680 in the first three quarters of 2009.
Anderson said the state distributed the $90 million between large metropolitan areas and less populated regions. It includes cities large and small, county governments, housing authorities and non-profits. He said some examples are the cities of Dallas, Fort Worth, Elgin and Holland, and Bastrop County.
Anderson said one goal was to not concentrate money in just big cities. The department realized what a unique opportunity it had to make an impact on areas large and small, he said.
“Some put emphasis on home ownership and others on getting families into decent, high-quality rentals,” Anderson said. “It was really across the board.”
Bauer said if his board decides to enter into the contract he doesn’t want his regular donors to stop contributing money.
“We’re still going to need their donations for our regular program,” he said.
