The Department of Housing and Urban Development is preparing to make tens of thousands of vacant houses that it has acquired through foreclosures available to low-income buyers or renters.
HUD is developing a plan to sell government-held houses to non-profit groups and state and local agencies at discounts of as much as 50 percent from their normal market value, Federal Housing Commissioner C. Austin Fitts said here at the National Association of Realtors' annual convention this week. The non-profit groups and agencies would then rent or sell the houses to people who could not otherwise afford houses, Fitts said.The Federal Housing Administration, a HUD division that insures home mortgages, has been taking possession of about 85,000 houses a year, and it has about 47,000 homes in its inventory. The government generally has tried to sell the houses at the highest possible price, but many of the houses have been slow to sell. In the meantime, managing the properties has been a drain on government funds.
In some communities, it costs HUD so much to hold the properties that "you could discount a house 50 percent . . . and save money," Fitts said.
"The economics of doing these different kinds of things are very good for us, and the social benefits are much better for the folks" who would get the housing, Fitts said. "It is ridiculous for people to be sitting in Fort Worth who can't afford a home when we're sitting on 5,000 homes in Fort Worth."
Fitts said HUD Secretary Jack Kemp last week gave his staff a "go-ahead" to try to translate the idea to sell the houses at big discounts into a workable program.
It was not clear how the plan Fitts described meshed with the overall housing initiative President Bush unveiled in a speech to the NAR a week ago. Bush said he had asked Kemp "to find new ways to put a portion of our FHA foreclosures into the hands of non-profit groups."
Bush's program calls for federal grants worth $2.15 billion over three years to help low-income families buy homes. That includes $567 million to help non-profit community groups rehabilitate government-held housing and resell it to low-income families.