What does $1 buy you in housing - hang onto your hats - HUD to the rescue

IMAGE: HUD


After searching for homes and talking in person to the people at HUD about foreclosures and recovery, I learned a few things. HUD Secretary Donovan Announces 2.1 Million in New Grants for Seven Homeless Programs in Arizona.  Grants are to assist the situationally homeless and not chronically homeless. Grants are administered by the states through local progams.


Here is the link for Arizona resources.  If you live in another state just click on this link to find information. 

WHAT DOES $1 BUY YOU IN HOUSING????

 HUD has many programs such as the Good Neighbor program designed to help firefighters, teachers and other public service workers substantial discounts in housing.  We are talking 50% discounts.  There are also discounts for Hurricane Evacuees. Programs exist for Indian (section 134), Aids, and for Public Housing residents. In addition each state has programs available such as the information found on HUD's Arizona homeownership page.  There is also the new EHLP program but it is not taking applications. But the program that seems the most exciting is the $1.00 program. 


Hang onto your hats it is not as good as it sounds. After a cursory reading on the program I determined to find some homes that fit the criteria. If you are low income,  and can find a home that has sat on HUD's site for over 6 months, it appeared that you could buy it for $1.00.  I can no longer find that wording and have included the official wording found today on the HUD website, at the end of this posting. 


After talking to HUD officials it seems that only government agencies such as the city of Phoenix or the counties or states can buy these homes for $1.00.  The government then rehabs the homes and sells them on the market.  Yup government helping the low income again (not). 


Here is the information if you are wanting to learn about this program and address your local administrators.  The wording might make you think it is available to homeowners for $1.00 but the revisions clarify a bit that only governmental agencies can buy these $1.00 homes. 

About Dollar Homes

HUD's Dollar Homes initiative helps local governments to foster housing opportunities for low to moderate income families and address specific community needs by offering them the opportunity to purchase qualified HUD-owned homes for $1 each.

Dollar Homes are single-family homes that are acquired by the Federal Housing Administration (which is part of HUD) as a result of foreclosure actions. Single-family properties are made available through the program whenever FHA is unable to sell the homes for six months.

By selling vacant homes for $1 after six months on the market, HUD makes it possible for communities to fix up the homes and put them to good use at a considerable savings. The newly occupied homes can then act as catalysts for neighborhood revitalization, attracting new residents and businesses to an area.

Local governments can partner with local nonprofit homeownership organizations or tap into existing local programs to resell the homes to low- and moderate-income residents of the community.

To find out if properties are available for sale in your community, visit HUD Homes and click on your state.

 Recovery Act Grants:  

*CREATIVE COMMONS

HUD AWARDS $118 MILLION IN RECOVERY ACT GRANTS  (AZ). Special grants were awarded on April 28th to help states combat rural homelessness. $2.1 Million was awarded to Arizona and are accessed through 7 existing homeless programs.

Lowest Home Ownership Rates since 1960's

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Watching today's news coverage and reading the USA Today's article about the drop in homeownerhip; several things became apparent. The prediction of my realtor friends and dire warnings of the housing depression was mild compared to today's estimates....

6 MILLION - repeat 6 Million out of 8 million homeowners lagging in payments now will ultimately lose their homes to foreclosure.

Face it most Americans love owning their own home and until recently it has been a great financial decision to own a home, less expensive than renting and a matter of pride...But now; not only are some people are afraid to buy, the banking industry is making it harder to qualify for a home, and the government is not addressing the actual unemployment rate in a real and substantive way.

Things need to turn around fast to help protect our neighborhoods and communities.

Right now in our local city you can buy a foreclosed home for between 50 and 100 thousand..... There are bargains out there, but be careful because there are also many homeowners that having been evicted may be suing the bank and trying to get their home back... not the money the home. Remember that many evicted wrongfully have homes that have sentimental value. This promises to be another mess coming down the pike for those that buy without checking title or ignoring problems with title.


According to this Prisonplane Blog :

"About 18.9 million homes in the U.S. stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.

The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.6 million in the year-earlier quarter, the U.S. Census Bureau said in a report today. The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999."

If you have read my previous blogposts; you will see that I think fraud has much to do with this foreclosure crisis, housing market crisis, or as some term it, blight on our local communities. Whatever the name for it, there are solutions for your situation. People need to stand up and fight for their homes and for reforms in banking and government.

Value of a foreclosed home

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There is great debate over values right now, and truthfully no one can really say what a home is worth with so many factors that affect cost being difficult to nail down. Here is an excerpt from an article from the government repo homes site on October 6,2009:

"The US is yet to recover from the economic crisis. People are faltering on loans after job loss – a phenomenon that has made foreclosures very common. Certain regions are riddled with foreclosures. Now the question that arises is what could be the value of a house in a region that has many foreclosed homes. In the eyes of a banker who is out to recover losses from bad mortgage, it may appear to be a valuable showpiece.
It may be pointed out here that Obama’s Making Homes Affordable program could not work out only because the lenders delayed loan modification. Most of the banks are so preoccupied with foreclosure filings and selling homes that they really do not have time for mortgage modification."

(In some ways, I suspect that the bank employees themselves who are responsible for doing loan modifications are just sloppy, lax and get paid either way. Who knows what imperatives they are handed from higher-ups. They're people. They see their own situation, rather than ours as home owners who have to figure out where to go and how to hang onto beloved pets we're committed to, if we lose this most basic necessity, the roof over our heads. They're insulated from the anguish, because to them we are numbers who represent profit and loss on paper, not human beings with needs.)

What a home could command in price three years ago, is irrelevant. Now we can't even use comps to get a per-sq-ft cost basis, because the recent sales are all over the map. A home down the street -a brick with three bedrooms, two baths and a fenced yard, - just sold at auction for less than $35,000. It was listed at $130,000 in 2008, when the owner lost his job and tried to sell.

Banks are cutting off their own noses to spite their faces on these foreclosures, because the government will buy them a new nose to replace it, so no worries if they lose billions.

Banks and efficiency - loan foreclosure specialists

Well this may not be news to some of you, but getting through to a live person and receiving information about your account is harder than crashing a party at the White House.

First you verify your account with the recorded greeter, press your number and speak to a live representative. Sounds easy, doesn't it?

NEXT you have the great joy of verifying all over again, your account number, full social security number, your name, mailing address, property address with zip code and any phone number. If they still doubt you then they ask if any of the numbers are cell phone.

All this just to ask full payoff. If a lawyer has become involved then those fees are added on and they can't tell you over the phone. What the heck? They have taken you through security, verification, stripping and still can't tell you information on the phone? Our loan foreclosure SPECIALIST ordered a request for another fax to be sent. Now you may not realize it but we have had a couple wanting to buy this place for 2 weeks. In fact, there have been two parties interested in buying the home. The reason I wanted the payoff amount is to sell the place. So, I asked the representative if we could call the buyers and send a fax of payoff to them also. Patiently the representative waited, as a three way call was initiated with the potential buyer, to fax the information to them as well. There should be no room for errors now unless the phone and fax lines all over the country go down.

We have now called 3 times in the space of a week and a half. Today, after 5 minutes of being preapproved to talk about our account; they said the fax had been sent and sorry they could not tell me over the phone the payoff. It's not allowed. Further it would be another two days so probably Wednesday since today is Saturday. For crying out loud, my buyers have already had to wait 1 week longer than they wanted for an answer.

I'm asking the bank to remove lawyer charges, on the basis that the lawyer acted prematurely during the time the bank said it was working with me and would not start the process. But initial reaction is that would be a short sale. I find a buyer for the full amount of loan (miracle) and they want it considered a short sale???? To those that don't know, a short sale means even if you can recover financially you cannot buy a house for about 2 years. If you sell in full you will be able to buy again as soon as you recover financially and credit wise.

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This house we did not want to sell, it is our rental house that we wanted to retire to. It had good renters and while it did not make us money it was a goal for the future.

Does anything here sound crazy to you - or is it just me?