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2010-11-30 13:25:59

Federal Way Finds New Owners for Bank and Government Foreclosure Homes


So far, 11 families have been helped by the House Key Federal Way program, which allows home buyers to purchase bank and government foreclosure homes with the aid of funds from the Neighborhood Stabilization Program (NSP).

The area of Federal Way, Washington was given $651,688 by the NSP in 2009. The city used the money, with the help of the Washington State Housing Finance Commission, to establish the House Key Federal Way initiative that offers down payment aid to people who wish to buy foreclosed residential properties.

Under the program, first time buyers are given monetary aid to purchase bank-owned, foreclosed and abandoned houses. The program was also meant to help neighborhoods in the area that have suffered from blight due to the huge supplies of foreclosed and empty properties. So far, 11 buyers have acquired new homes under the initiative, while a further 20 are, currently, in negotiation to buy bank and government foreclosure homes.

According to city officials, the average value of houses offered under the program is $250,000, with most properties chosen from neighborhoods that have medium to high foreclosure risks. Local officials have revealed that the initiative has gone a long way towards stabilizing neighborhoods and has prevented further deterioration of the area’s residential stock.

City housing data showed that foreclosures average 150 to 300 in the city, with majority of foreclosed properties lost due to subprime loans. Those homeowners who also borrowed against their properties’ equity also suffered when the recession started and, subsequently, lost their houses to foreclosures.

These properties, according to city officials, are the targets of the House Key program. Down payments are provided to home buyers who earn less than the city’s median income of about $90,000 for households that have up to two members. Households comprise of three members or more can qualify if they earn less than the median income of $97,000.

Assistance for these buyers was provided through a second mortgage worth between $30,000 and $50,000. Deferred payments with 0% interest are also part of the financial assistance. Applicants who wish to purchase bank and government foreclosure homes under the program are also required to provide proof that they can pay the required mortgage.


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