The loan would have allowed the city to buy, fix and sell distressed properties that were not finding private buyers. The loan proposal, submitted by the Community Development department, would have fulfilled Winona’s goal of improving many old homes in the area.

However, council members argued that it is not the responsibility of the city to buy, redevelop and sell repossessed homes and instead called on private developers to spearhead the efforts.

Councilwoman Deb Salyards pointed out that it is up to the market to decide how the city’s foreclosed homes are purchased and sold. Her opinion on the proposal is echoed by council members Debbie White, Gerry Krage and George Borzyskowski, and Mayor Jerry Miller who all opposed the measure.

The city applied for the loan at the Greater Minnesota Housing Fund and would have been approved if the council supported the proposal. Since 2007, the city saw about 100 repossessed homes with only a few having been sold. And the remaining unsold, vacant foreclosed houses are becoming blight in neighborhoods, according to Assistant City Manager Judy Bodway.

Meanwhile, Councilmen Al Thurley and Tim Breza supported the proposal which they claim target deteriorating foreclosed houses that private buyers are not interested in. Thurley believes that the loan is a tool that the city can use to prevent these vacant properties from becoming blights if the private sector would not take matters into their own hands.

On the other hand, Borzyskowski claims that he received calls from local developers who said that they should purchase and rehabilitate repossessed homes and not the city.

Lucy McMartin, director of Community Development, explained that proceeds from the sale of redeveloped foreclosed properties would have been used to repay the loan from the Housing Fund.

She added that potential homebuyers would have been subjected to income criteria which would make them eligible to receive loans that could reduce the sale price by as much as $15,000. She pointed out that about 50 percent of houses in Winona were constructed before 1940 which is far higher than the state average.

McMartin added that city officials are planning to apply for Community Development Block Grants to redevelop some of the aging and repossessed homes.

City Wants Developers to Buy, Fix and Sell Repossessed Homes is a post from: Foreclosure Homes Investing

With the stringent mortgage requirements at present, the revised old system will definitely be of great help. Aside from that, Mayor R. T. Rybak also said that funds quadrupled for a project that aims to assist homebuyers of foreclosed homes regarding down payments and closing costs. Homebuyers may opt to use both programs simultaneously or choose any of the other.

How is a contract for deed different from a mortgage loan? In a contract for deed transaction, all payments are settled by the buyer before they get the deed of the foreclosed property. When a buyer defaults on payment, they lose all claims previous payments made.

Though the program gives a lot of opportunities to aspiring homeowners, it is also prone to scams. Hence, interested buyers must be very careful and discerning when transacting with anyone.

Homebuyers who would go for contract for deed are required to work with a financial counsellor who will help them decide on the budget that suits them. Also, they have to pay a two-percent down payment or $2000, whichever is smaller. Lastly, their monthly income must not exceed 115 percent of the average income in the area.

Amortization of payments in a contract for deed is over thirty years. There is a subsequent balloon clause after three years where it assumed that a buyer who has been paying for that long period is qualified for financing.

Buyer may choose from foreclosures in the areas of St. Paul or Minneapolis. More than sixty repossessed properties are sold by the Greater Metropolitan Housing Corporation and Dayton’s Bluff Neighborhood Housing Services, among others.

More Minnesota Foreclosure Properties Expected To Be Sold Through Contract for Deed is a post from: Foreclosure Homes Investing