More than a dozen families have taken advantage of a program in Redmond that helps buyers purchase a home and aids neighborhoods by filling vacant houses and avoiding blighted streets.

Redmond received $1.5 million in 2011 for the third round of the Neighborhood Stabilization Program, a federally funded program that targets regions hardest hit by foreclosures — and while the majority of the funds have been used, the clock is ticking to spend the remainder within the time set by the program.

“Some of the funding was ‘recaptured’ from cities that hadn’t made sufficient progress spending the money but they didn’t take our funds because Redmond had shown good progress,” said Heather Richards, Redmond community development director.

In fact, Redmond’s approximately $150,000 in remaining funds may expand if qualified buyers are found because the Oregon Housing and Community Services is redistributing the recaptured funds to more viable programs on a first-come, first-served basis.

Fourteen families have purchased homes in Redmond using the program, which helps qualified buyers by assisting with down payments, minor repairs and closing costs. Buyers must occupy the bank-owned homes and pay back the down payment assistance when the home is resold.

The local nonprofit Housing Works is Redmond’s partner in the program, which was expected to wrap up in 2012 but has taken longer due to the low inventory of affordable homes in Redmond.

“We’ve had people qualified but they couldn’t find a home in the targeted area that met the definition required for the program,” said Kelly Fisher, homeownership manager for Housing Works.

To qualify, buyers must earn less than 120 percent of the median income for the area, $75,750 for a family of four. Purchased houses must be in Redmond target zones, mostly west of Dry Canyon, in both southwest and northwest neighborhoods. Buyers cannot qualify if they have more than $25,000 in liquid assets (not counting retirement accounts) and homes must be sold for 1 percent less than assessed market value.

“Right after the program began ,the state law about foreclosures was passed, which bogged down the court system and made the home inventory even thinner,” said Richards. “We’ve had a lot of people interested in the program, but the price point (most could afford) was in such a sweet spot that we had investor groups with cash buying up houses instead.”

Housing Works was recently approved as a “community buyer” for the National Community Stabilization Trust, which enables agencies to find bank-owned houses in its area before they hit the Multiple Listing Service, so it can make an offer before the general public.

“There aren’t a lot of homes in the database but we’ve managed to buy one and made offers on two more in the last couple of months, and this way we can get homes into the hands of owner/occupants, not investors,” said Fisher.

NSP participants buying homes purchased by Housing Works will still need to obtain traditional financing but getting first crack at houses that might otherwise sell too fast will bring more houses into the program, she added.

Redmond was one of four communities selected for the third round of NSP funds, based on a formula that measured notices of default, foreclosed homes and lack of mail acceptance. The city has until March 2014 to spend the remaining funds and any more it may receive from the reallocated monies, but the program won’t necessarily stop there, said Richards.

“It’s not entirely clear yet how it will work, but when those houses are resold, the down payment money will come back to the city and we can recirculate the funds through a similar program and achieve the same goal,” she said.

Potential buyers interested in the program should start with getting prequalified for a mortgage, said Fisher. Then they can start working with a real estate broker knowledgeable about the NSP and target zones in the city. Meanwhile, qualified buyers need to take a homeowners class through Housing Works, either locally or online.

Contact

Neighborhood Stabilization Program

Kelly Fisher, 541-323-7411

www.housing-works.org