Are you tired of looking at that broken-down foreclosure across the street with the waist-high weeds and broken window?
You may not have to worry much longer!
Hernando County is now eligible for up to 5.6 Million Dollars in Federal Aid to help mitigate the foreclosure situation and repair/restore some of those broken homes.
 |
Homes like this may be helped by these funds and
re-sold or rented to low-medium income families. |
My understanding is this…Government gets up to 5.6 Mil to purchase homes that are in foreclosure and/or blighted (unliveable) in Hernando County. The government can then either rehab the homes and sell them, or tear them down and either rebuild the home or sell the dirt. 25% of the funds must be used specifically for low-medium income housing (families whose incomes do not exceed 50% of the median area income). The homes that are not re-sold will most likely be rented out.
The purpose of this program is to stem the tide of this declining market….but is it really going to help? I’m not 100% convinced…I definitely get the intent and it’s noble and good and whatnot…but let’s use an example to illustrate my thinking…
You own a home in Spring Hill…there are two homes on your street that have been foreclosed and are really in pretty bad shape. They’ve been for sale for a while, but nobody’s jumping on them…they’re too much work for a homeowner who has other options, and they’re just not priced low enough for an investor to make the move.
The government buys both houses, renovates them and makes them pretty again, and then re-sells them….here’s the problem… it takes time to renovate a house (I know, I’ve done 4 homes in the past 5-6 months). The market is declining at about 3% per month, and the government is not selling these to people who are paying above market-value for them…they’re going to put them out on the open market just like any other seller…and they’re going to compete for the same buyers (all of whom are looking for a smokin’ deal)…only…the government doesn’t have any money directly invested in the homes, and they aren’t required to necessarily turn a profit on them….so they have a different base to start from when they’re selling and competing with you for that buyer…that one buyer/month who is looking for a home like yours (and theirs)…they can lower their price easier than you can…and once they sell for less…they become the newest comp for you (twice over, because they initially bought at a discount because the house needed work).
So…the government buys at a discount, fixes up, and then sells at a discount or rents to low-income families…does that really help you? In some ways, yes…you no longer have to drive by that house and see it looking all broken…but…if you’re trying to sell at the same time…they’re not really lowering the inventory…they’re improving your competition, and going after your buyer.
That’s my concern…Two sides to every coin, I suppose. Only time will tell.
What are your thoughts?
For more information, please see the following:
US Department of Housing & Urban Development (HUD)
Florida Department of Community Affairs
article by Barbara Behrendt at The St. Pete Times
Press Release from Gov. Charlie Crist
Information Page from StableCommunities.Org
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About the Author
Josh Hanoud is the #1 Top Producing Agent at Tropic Shores Realty in Spring Hill, FL and in the top 3% of all real estate agents in Hernando County, Florida (2007). He also happens to be the co-founder (along with Natalie) of the
Hernando Luxury Homes website which aims to showcase the best properties that Hernando County and the surrounding Nature Coast has to offer. Whether buying, selling, relocating, or investing - Josh & Natalie are proud to offer a higher level of service. Contact them today at 352-397-5182 or Josh@HernandoLuxuryHomes.com to see what they can do for you.
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