The Real Deal Miami

Up to 60 Coleman Park homebuyers to be granted foreclosure purchases at half price

By Vanessa Blum | December 18, 2009 02:18PM

The city of West Palm Beach launched a neighborhood revitalization program this week to allow as many as 60 qualified families to purchase foreclosed or abandoned homes for half price.

Federal funds were used to acquire and rebuild the properties in the city’s historic Coleman Park neighborhood — a once vibrant area blighted by poverty and crime. The goal is to encourage new homeowners to move into the downtrodden area and help transform it into a thriving mixed-income neighborhood.

Residences are expected to sell for $90,000 to $160,000. Purchasers must make a small down payment and can secure a mortgage for half the purchase price. The city foots the remainder of the bill — up to $80,000 — as a forgivable loan. Monthly mortgage payments under the program could be as low as $500.

West Palm Beach is among several Florida cities awarded grants under the Neighborhood Stabilization Program administered by the U.S. Department of Housing and Urban Development. The federal rescue plan aims to help cities convert a glut of foreclosed and abandoned home into occupied residences.

“It’s a win-win,” said Eric Sain of the Corcoran Group, past president of the Realtors’ Association of the Palm Beaches. “From a real estate standpoint, it will help a market that’s in recovery add sales to the books.”

Sain said the initiative could provide opportunities across the industry — from mortgage brokers to carpenters and painters.

“Those 50 properties are going to keep people working,” he said.

Prospective homebuyers looking to participate in the initiative must have an annual income near the area median — in West Palm Beach that is a maximum of $72,360 for a couple or $90,480 for a family of four. They must occupy the home as a primary residence and complete an 18-hour course on homebuying.

If the property is sold during the first five years, the initial purchaser is allowed to receive any increase in value. However, the funds invested by the city flow to the subsequent owner, who must meet the same qualifications. The government loan is forgiven after 20 years.