Minneapolis begins to rehab properties in neighborhoods hardest hit by foreclosure
The foreclosure recovery process in Minneapolis picked up pace with Mayor R.T. Rybak and the Minneapolis City Council approving a $6.5 million award in National Stabilization Program (NSP) funds on Friday, March 27. This is part of the $14 million in funding that the City has received from the Department of Housing and Urban Development (HUD) and the State of Minnesota to support the City's strategy to reinvest in these neighborhoods.
The award will be distributed among nine nonprofit developers to rehab 236 units, ready for occupancy, in neighborhoods hit hard by foreclosure. Developers will target 130 units to households at 50 percent of median income (about $40,450 income limit for a family of four in Minneapolis by NSP standards). Of the 236 units, approximately 35 percent will be rental and 65 percent will be for ownership.
An abandoned home or a foreclosed home requires some repair in order for it to be re-occupied. Today’s approval of funding will be used to assist local, non-profit developers with construction gap financing to cover the difference between the development cost (purchase price and the cost of rehab) and the sale price. The properties will then be sold or rented to income-qualified tenants, bringing people back on the blocks in communities hardest hit by foreclosure.
The remaining funds will be spent on land banking ($4,288,212) to acquire and demolish foreclosed properties deemed unfit for habitation and hold as vacant parcels until redevelopment is possible; demolition ($1,700,000) of Minneapolis properties that are boarded and vacant and require demolition; and financing ($500,000) to develop a down payment and closing assistance program, based on the highly successful Minneapolis Advantage Program that addresses the affordability gap in homeownership opportunities.
Published Mar 30, 2009