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What is the Minneapolis Foreclosure Recovery Plan? 

In Minneapolis, residential mortgage foreclosures continued to rise until 2009 when decreases occurred. The decreases are partially due to lenders voluntary moratorium on foreclosures, short sales, and the increase foreclosure prevention loan modifications or other foreclosure recovery activities. The foreclosure rate was slightly higher in 2010 with 2,308 foreclosures , but close to 2009 rates with 2,233 foreclosures in 2009; significantly down from 3,077 in 2008 and 2,895 in 2007. Many of these foreclosures are on rental investment properties. Minneapolis neighborhoods hardest hit by foreclosures are in South Central, Northeast and North Minneapolis. Statistics and maps of mortgage foreclosures in Minneapolis.

The City of Minneapolis focus on prevention, reinvestment and market repositioning in 2011 and beyond will continue to lead to market recovery in our communities. The Minneapolis foreclosure recovery plan is a strategic and timely government intervention for prevention, reinvestment and repositioning the market place only to the extent necessary to "tip" the market toward restoring a healthy housing market.

Minneapolis strategies to recover a healthy housing market are:

Foreclosure Prevention

Mortgage foreclosure prevention counseling shows that is costs approximately $400 to prevent a foreclosure, where the estimated cost is $78,000 once a property is in foreclosure. In 2009, 461 foreclosures were prevented in the City of Minneapolis.

City partnerships that address mortgage foreclosures:

How the City is Reinvesting and Repositioning

The Neighborhood Stabilization Program

The Neighborhood Stabilization Program (NSP) provides assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. 

The Minneapolis foreclosure recovery plan identifies over 20 neighborhoods that are hardest hit by foreclosure for strategic investment of NSP resources to dramatically impact blocks in these neighborhoods to protect public and private investment and to ultimately restore a healthy housing market. In order to achieve this impact, Minneapolis is collaborating with the development community with significant involvement from general contractors, property management companies, material suppliers, and marketing and real estate professionals. 

Real Estate Acquisition

Minneapolis uses two innovative concepts in its efforts to purchase real estate owned propertiesthe First Look Program and the Twin Cities Community Land Bank

The First Look Program will help restore neighborhoods hit hard by foreclosures by allowing the City the opportunity to acquire foreclosed properties before they hit the open market. The First Look Program is coordinating the transfer of real estate-owned properties from financial institutions nationwide to local housing organizations, in collaboration with state and local governments. Lenders Wells Fargo, CitiGroup, Chase and otherswill make the properties available pre-market at adjusted pricing. The First Look program will provide a key component of recovery efforts, to gain control of properties and then manage the disposition and redevelopment of those properties at a scale large enough to build confidence and stimulate investment. 

The First Look Program was developed by the National Community Stabilization Trust, a consortium of nonprofit housing and community development organizations (Enterprise Community Partners, the Housing Partnership Network, the Local Initiatives Support Corporation, NeighborWorks America, and others). 
 

Twin Cities Community Land Bank acts as intermediary and as an interim acquisition lender, advancing funds to allow for a quick and strategic response to acquisition and redevelopment opportunities, and as lender to non-profit developers undertaking rehabilitation and new construction.  

The Northside Home Fund Cluster Developments

The cluster approach focuses on small geographic areas, or "clusters", intended to make a noticeable positive impact on the housing stock and to stabilize and strengthen the homeownership market of North Minneapolis neighborhoods. The Northside Home Fund, commit to developing sustainable solutions to the serious community and economic development issues facing North Minneapolis, and its partners have removed the blighting influence of more than 100 boarded and vacant properties in the clusters through property acquisition, demolition, and working with property owners to bring their buildings up to code for re-sale to stable owner-occupants. 

Useful Links

When Investors Buy Up the Neighborhood/PolicyLink Report

Repositioning

As properties are acquired, the City and its partners are working collaboratively to reposition neighborhoods for market recovery. To rebuild a healthy housing market in neighborhoods affected by foreclosures, the City works with neighborhood and community-based marketing efforts to bring in new buyers. The Citys goal is to engage the private market as much as possible in achieving a stable, healthy housing market. 

Green Homes North

The City of Minneapolis and its partners will create the Green Homes North program, a loan and subsidy pool to build 100 green homes in North Minneapolis. Green Homes North will fund the construction of approximately 20 homes a year for the next 5 years. 

Design Competition Helps Rebuild Willard Hay Neighborhood in North Minneapolis

Part of the strategy and commitment to rebuilding communities affected by foreclosure, the Bearden Place Design Competition is sponsored by the City of Minneapolis and the Builders Outreach Foundation (BOF). 

Interactive Website Promotes City Living

LiveMSP.org promotes Minneapolis and Saint Paul neighborhoods with the goal to sell homes and celebrate city living. This interactive website helps prospective home buyers learn more about what Minneapolis and Saint Paul have to offer, showcases all of the neighborhoods, and educates people about the dozens of home purchase/renovation incentives available. The site is also a destination for those who already live here to share their enthusiasm for city living, find home renovation loan and grant programs, and stay current on local events and entertainment. 

City offers homeownership incentives and mortgage & home improvement programs

The Minneapolis Advantage NSP Mortgage Assist ance program provides a forgivable loan to help assist homebuyers purchasing in neighborhoods challenged by foreclosure. Mortgage & Home Improvement Programs

Last updated Aug 21, 2013