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Home > Newsroom > FORECLOSURES) Foreclosures Tapped For Cheap Housing

Montgomery County, MD officials initiate a state-sponsored effort to convert foreclosed homes to affordable housing for low- to moderate-income families as part of the Obama administration's $3.9 billion Neighborhood Stabilization Program (NSP).

The thrust of the NSP in many communities is to help integrate low-income families into middle- and upper-income communities in order to break up the concentration of poverty in inner-city neighborhoods.

Montgomery County witnessed 1,542 foreclosures between January and March, the fourth-highest total in the state. So far, county officials have purchased homes with NSP money in the communities of Germantown and Wheaton, which experienced the highest foreclosure rates in the county, a bedroom suburb of Washington, DC. Renters occupy nine of the homes.

The county's Housing Opportunities Commission plans to purchase seven more houses to renovate and rent with its remaining $7 million. Homes have been purchased for an average price of $242,860. The average rehabilitation cost has been $43,260 and the average rent is $934.

Families can remain in the houses as long as they can afford the rent. If they leave, the structures remain in the county's affordable housing portfolio for new renters.

Rehabilitation includes new siding and windows, deck replacement, energy-smart appliances, landscaping, insulation, a heat pump, carpeting and other needed repairs.

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Source: Housing Affairs Letter, June 12, 2010

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