Minneapolis approves $5.6 million foreclosure plan

The Minneapolis City Council and Mayor R.T. Rybak approved a spending plan Friday, Nov. 21 to use $5.6 million in federal Neighborhood Stabilization funds to acquire and redevelop foreclosed properties in neighborhoods hardest hit by foreclosures.

The funds are the result of the Housing and Economic Recovery Act of 2008, which was passed by Congress and signed into law in July to help state and local governments respond to rising foreclosures and falling home values. The funds are targeted based on the number and percent of foreclosures, subprime mortgages, and mortgage defaults and delinquencies. The City will now submit its plan to the U.S. Department of Housing and Urban Development (HUD) for approval.

The $5.6 million plan is focused around purchasing, re-developing, and rehabilitating foreclosed properties:

$500,000 will establish financing mechanisms to purchase and redevelop foreclosed homes and residential properties, including using soft seconds, loan loss reserves and shared equity loans for low and moderate income homebuyers. Contract for Deed or incentive programs geared to home homeownership will also be considered.

$1,464,800 will support the First Look Program, a new national pilot project launched in Minneapolis to coordinate the transfer of real estate-owned properties from financial institutions nationwide to local housing organizations, in collaboration with state and local governments. This funding will also provide value gap financing to partners to cover the difference between cost of purchase and rehab of property and final sale price.

$1,515,200 will be used to acquire vacant foreclosed properties that are not candidates for rehabilitation, demolish them, and hold them as vacant parcels until the market is ready to absorb new development of owner-occupied housing units.

$1,700,000 will be used to demolish blighted structures. To date, the City has more than 900 properties on its vacant and boarded list.

$420,000 will cover program administration costs within the City of Minneapolis Departments of Community Planning and Economic Development, Finance and Intergovernmental Relations.

Additional Neighborhood Stabilization funding guideline details:

Published Nov 21, 2008



Contact us

Email updates

Find a service

About this site

For employees

For reasonable accommodations or alternative formats, contact 311.
People who are deaf or hard of hearing can use a relay service to call 311 at 612-673-3000.
TTY users can call 612-673-2157 or 612-673-2626.

Para asistencia 612-673-2700, Yog xav tau kev pab, hu 612-637-2800, Hadii aad Caawimaad u baahantahay 612-673-3500. 


311 call center

TTY relay service

City of Minneapolis Facebook City of Minneapolis Twitter City of Minneapolis YouTube ChaNNEL Minneapolis 311 Minneapolis 14 Government TV City of Minneapolis LinkedIn

Minneapolis, City of Lakes logo