Vacant foreclosed homes could be bought up by nonprofits and resold to low-income buyers under a new county pilot program.
Communities in other areas hit hard by the foreclosure crisis have been able to use federal Neighborhood Stabilization Program funds to buy, rehabilitate and resell foreclosed properties. However, San Mateo County has been unable to get those funds, according to a staff report from Duane Bay, director of the county’s Department of Housing.
Instead, the department is launching a pilot program using funds designated for community projects and a $100,000 grant from the Wells Fargo Foundation. Up to $300,000 for each house will be loaned to nonprofits, who will make the purchases and handle the resale to qualified buyers.
The project, approved by the Board of Supervisors last month, aims to buy up to four foreclosed properties, but the participating nonprofits haven’t been identified yet, Bay said.
“We will start by doing one, then make incremental decisions on pace to proceed,” Bay said in an email. Some local real estate brokers question whether the project makes sense.
“It has good intentions, but in this market place, it has to be successful for the seller and buyer,” said Oscar Lee, a broker with Red Hawk Real Estate in Menlo Park. Lee, who specializes in foreclosed homes, said that such sponsor programs are challenging for the property seller due to the extra layer of government bureaucracy.
According to report released by DataQuick last month, foreclosures in San Mateo County were actually down about 6 percent in the first quarter of this year as compared to this time last year. Default notices, which are considered the first sign of foreclosures, were also down in the county nearly 12 percent.