LA Times: HUD $1 Homes program a "failure"
This weekend the LA Times published the results of an in depth investigation of the outcomes for a set of homes that HUD sold to local governments in Southern CA for $1 with the intent that they offer affordable homeownership opportunities. The story points to the need for active monitoring and ongoing mechanisms to both preserve affordability and ensure that homeowners actually benefit from these programs. The article concludes:
"" * At least 43 of the 62 homes were sold to housing contractors and investors. Within months after purchase, nearly all were resold, and for an average of three times the original sales price.
* The homes continued to change hands frequently. Some homes have been bought and sold eight times in as many years, defeating the intent of the program to encourage buyers to put down roots and revive downtrodden neighborhoods.
* Instead of continuing to provide opportunities for low-income buyers, these homes have become priced beyond their reach, shooting up more than 450% in value from 2000 to 2008, based on sale prices. Moreover, there are no rules to ensure the homes remain affordable when they are resold.
* Nearly half of homes ended up with buyers who struggled with homeownership, missing property tax payments, defaulting on their loans, and in at least nine cases falling into foreclosure.
* The program goes unmonitored."
The full article is online at: http://www.latimes.com/news/nationworld/nation/la-fi-dollarhome12-2...
"" * At least 43 of the 62 homes were sold to housing contractors and investors. Within months after purchase, nearly all were resold, and for an average of three times the original sales price.
* The homes continued to change hands frequently. Some homes have been bought and sold eight times in as many years, defeating the intent of the program to encourage buyers to put down roots and revive downtrodden neighborhoods.
* Instead of continuing to provide opportunities for low-income buyers, these homes have become priced beyond their reach, shooting up more than 450% in value from 2000 to 2008, based on sale prices. Moreover, there are no rules to ensure the homes remain affordable when they are resold.
* Nearly half of homes ended up with buyers who struggled with homeownership, missing property tax payments, defaulting on their loans, and in at least nine cases falling into foreclosure.
* The program goes unmonitored."
The full article is online at: http://www.latimes.com/news/nationworld/nation/la-fi-dollarhome12-2...
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© 2012 Created by Center for Housing Policy staff.
