Redevelopment Agency Plans to Buy Homes on Foreclosure Lists

The redevelopment agency board of Lake Elsinore in California is considering the proposal to purchase about 15 houses on foreclosure lists at reduced prices, renovate and sell them to low-income and moderate-income families.

It is expected that the board, which is made up of five members of the city council, will consider approving the proposal.

Under the proposal put forward by officials of the redevelopment agency, nearly $900,000 would be contributed for the neighborhood stabilization program which will be managed by the Riverside Housing Development Corp., a nonprofit housing corporation.

The Riverside Housing plans to spend around $2.8 million to purchase about 15 foreclosed homes in Lake Elsinore. The money contributed by the redevelopment agency will be used to finance the rehabilitation of foreclosed houses that will be purchased.

The renovated properties will then be sold at reasonable prices to potential buyers who will agree to live in the houses.

Chairman of the Lake Elsinore’s agency board Thomas Buckley is confident that the goal would be easy to accomplish given the huge number of foreclosure properties available for sale and their reduced costs. Revenues generated from the sale of renovated properties would be invested back on the process.

Buckley has expressed his hope that the program would accomplish more than the target number of 15 foreclosed properties.

The program will focus on purchasing properties that have been damaged by vandals or on the brink of deterioration because they have been abandoned and vacant for so long. Not included in the program are well-maintained houses that banks could easily sell without any rehabilitation.

City officials said that the program will transform an abandoned, empty and vandalized foreclosed house into an owner-occupied. They added that the goal is not to help out-of-state landlords but to assist neighborhoods hardest hit by the foreclosure crisis and to put people into empty homes.

The renovated properties will not be counted as affordable houses, though they will be sold at affordable prices to low-income and moderate-income families chosen based on a federal formula. Classifying these properties as affordable house would put a limit on their market values and future potential buyers.

Houses under the program would be excluded from Lake Elsinore’s legal mandate of a balance housing. They will be geared toward the prevention of decay in neighborhoods brought about by abandoned and dilapidated foreclosed properties.

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