Nonprofits to Help Trim Number of Foreclosed Properties

House flipping business is proving to be a popular way to earn quick profits and at the same time, help communities fight the blight brought about by foreclosure properties. In New York, several nonprofit organizations get into the business of purchasing foreclosed homes, rehabilitating and selling them.

Nonprofit organizations, with the help of the government in Orange County, will purchase foreclosed properties in three cities, rehabilitate them and sell them at bargain prices to low income and moderate income families in the area.

However, unlike market investors who get into the house flipping business purely for the reason of earning a profit, nonprofit organizations aim to address two pressing issues with their project; providing affordable housing and eradicating the blight of abandoned foreclosed houses.

The nonprofit organizations, including the Housing Partnership Development Corp., will use federal and state funds amounting to over $4 million, to buy and renovate about 75 foreclosed houses.

Dan Martin of Housing Partnership said that if the group could buy, rehabilitate and sell even just one distressed property on a block, it would help a lot in stabilizing the area.

The organizations are negotiating with several banks, including M&T, Orange County Trust, Provident and Walden Savings, to establish a credit line to expedite the process.

City officials of Port Jervis, Middletown and Newburgh will help identify the foreclosure houses that will be recipients of the project’s efforts.

Alice Dickinson of the Orange County Rural Development Advisory Corp. explained that nonprofit organizations intend to identify same properties that private investors want. She added that these properties should carry reasonable prices and would not need major rehabilitation.

According to industry experts, the organizations will purchase repossessed homes from typical channels of acquisitions, including tax sales, foreclosure auctions and lenders.

The nonprofit organizations will sell the renovated properties to potential buyers who earn between 50 to 120 percent of the median income in the region or an annual income of not less than $40,000 and not more than $100,000.

Price subsidies will be offered to eligible buyers to allow them to purchase the foreclosure properties for less than the total amount paid by nonprofits.

Orange County’s Office of Community Development director Tom Lane said that resale provisions will be implemented to prevent homebuyers from flipping the properties for quick profits.

The nonprofit organizations will also apply for additional $14 million in federal funds to expand the initiative into several towns.

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