The Housing Chronicles Blog: Habitat for Humanity takes advantage of foreclosures

Monday, May 19, 2008

Habitat for Humanity takes advantage of foreclosures

According to an AP story, the rising tide of foreclosures has lowered prices enough for the non-profit builder Habitat for Humanity to take advantage:

The foreclosure crisis that has forced thousands of families from their homes has given something good to the nation's best-known housing charity: Cheap properties for sale in communities around the country.

Some Habitat for Humanity chapters have seized buying opportunities in neighborhoods affected by the mortgage meltdown, snapping up scores of empty lots and unoccupied homes - some for as little as half price...

In the Minneapolis area and elsewhere, the charity that offers affordable housing to low-income families is buying foreclosed homes and using volunteers to renovate them. If that's not practical, the houses are torn down to make way for new dwellings. In some cities, Habitat is even buying parts of subdivisions that developers couldn't afford to finish.

Habitat officials don't see themselves as capitalizing on the misfortune of others. They say putting families into affordable Habitat homes is much better than allowing properties to remain vacant or letting slumlords grab them...

An official with Americus, Ga.-based Habitat for Humanity International said the extent to which local affiliates take advantage of foreclosures depends on how much money they have.

In Fort Worth, for instance, the local chapter is negotiating to buy part of a 160-lot subdivision that a developer left unfinished. Yager said the plan is to purchase 50 of the remaining 100 vacant lots and put single-family homes on them.

Yager declined to say how much he expects to save because his group is still negotiating. But he said the Fort Worth market for such lots has dropped around 30 percent to 40 percent since the height of the real estate boom.

In nearby Dallas, another Habitat affiliate has picked up about 150 lots at a roughly 50 percent discount as developers dump inexpensive lots in the city's southern neighborhoods to focus on more profitable areas to the north.

The Habitat affiliate in Phoenix had struggled in recent years to find affordable land. But it is closing in on a deal to complete a 20-home development abandoned by a company that went bankrupt. Habitat expects to buy 14 unfinished lots for around half price.

In Milwaukee, the city is buying condo units in one large complex - many of them in foreclosure - and then selling them to Habitat for about $5,000. Habitat volunteers renovate them, and the group sells them to clients for $25,000.

Legislation working its way through Congress might help Habitat and nonprofit housing agencies take even greater advantage of bargains. One bill would send $15 billion to the hardest-hit states for the purchase and improvement of foreclosed property. States could then make those properties available to nonprofits such as Habitat. However, the Bush administration has threatened a veto.

No comments: