Repossessed Houses for Sale Abound in Saint Paul, Minnesota

Repossessed houses for sale abound in Saint Paul, Minnesota, according to Jim Erchul, head of the Dayton’s Bluff Neighborhood Housing Services, a nonprofit focused on affordable housing in the area.

Erchul said that Dayton’s Bluff and its nearby areas in Saint Paul have the second highest number of foreclosure houses in the entire state, second only to North Minneapolis, which tops the foreclosure list in the state.

In the third quarter of this year, more than 10,600 distressed homes in Minnesota were notified of foreclosure postings and out of these postings, more than 5,100 were already repossessed by lenders. With a foreclosure rate of one in 217, Minnesota ranked 18th in a chart of U.S. states based on foreclosure rates.

Erchul also added that a lot of the distressed foreclosure properties in Saint Paul have been left vacant by lenders including Fannie Mae and Freddie Mac and are waiting for buyers.

To help put people into these foreclosure properties, Erchul and his community development group DBNHS have been providing low-interest loans to prospective home buyers for repairs and rehabilitation.

DBNHS has also been purchasing repossessed houses for sale, fixing them and then selling them to families earning incomes not higher than 80 percent of the median income in Saint Paul.

The nonprofit, which was launched in 1980, has helped construct or fix 2,000 residential units and has spent $120 million helping protect the area from falling into decay.

In October, it launched its pilot program First Look, which was designed to acquire over 600 foreclosure homes and buy 18 distressed properties to rehabilitate and resell to lower-income families.

From time to time, Erchul receives emails from lenders asking him to take at look at certain foreclosed properties if his program wants to include the properties. What Erchul does is to send his appraiser to examine the properties and see if it is profitable to buy.

DBNHS has also received financial assistance from foundations, including the Pohlad Family Giving Foundation which has recently provided DBNHS with $1 million to help homebuyers. Pohlad said that home buyers can get up to $8,000 from the fund for closing costs or down payment, but they need to live in the purchased properties for at least seven years.

According to Erchul, DBNHS does not only focus on repossessed houses for sale. It also maintains affordable rental housing for lower-income families that move to the area so their children can attend local elementary schools.

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