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Restored and ready to sell: Stimulus funds fix homes for buyers short on cash

Feb. 1, 2011
Detroit Free Press Business Writer

Distressed houses across metro Detroit, some in near-demolition condition, have been restored as part of federal stimulus efforts and are ready for sale.

Millions of federal stimulus dollars were poured into the effort. Michigan communities received $253 million in late 2008 through the Neighborhood Stabilization Program (NSP) to help low- and moderate-income home buyers, investors and nonprofit groups breathe life into thousands of vacant, foreclosed homes. Michigan was allotted an additional $223.9 million last year to continue the work.

The renovated homes include a three-bedroom, one-bath, 922-square-foot home in Westland listed for $75,000 and a 1,500-square-foot, three-bedroom, two-bath home in Oak Park for sale at $90,000.

These two homes, which were debuted Monday, are part of an effort to sell at least 100 restored homes priced between $50,000 and $150,000 in 15 metro Detroit communities with a push by the Michigan Association of Realtors and Home Renewal Systems, a Farmington Hills-based company that has handled the NSP program for Eastpointe, Ecorse, Ferndale, Hazel Park, Holly, Inkster, Keego Harbor, Lake Orion, Oak Park, Ortonville, Pontiac, Redford, River Rouge, Royal Oak Township and Westland.

Joanne Inglis, director of housing and community development in Westland, said 1457 Gloria St., for sale for $75,000, has new appliances, cabinets and countertops, electrical and plumbing repairs, landscaping and new carpet.

"In other houses, we are replacing furnaces and roofs. ... Anything that brings the house to the point where a new homeowner doesn't have to worry about anything for the first five years of ownership," Inglis said.

The government program has resulted in the houses getting more substantial renovations than most private investors would make.

Eric Goosen, a St. Clair Shores broker with Real Estate One, said he is marketing nine NSP houses in that community priced from $60,000 to $109,900. They all needed major work, including foundation repairs, kitchen and bathroom updates, furnaces, drywall and windows.

"That's the nice thing about this program. It saved properties that were too far gone for investors to get involved in," he said. "It's a stimulus so it puts people to work. They bought materials locally. It's kind of recycling money into the market."

Robert R. LaBute, founder of Real Estate Management Specialists in Detroit, is marketing nine houses Labor Management of Troy rehabilitated for the City of Detroit. These homes, on Detroit's east side, are listed for $37,000 to $39,000, but much more was spent to fix them.

"They have new windows, new roofs, new kitchens, full basements and are lead free," LaBute said. "They are just gorgeous. Everything is new."

Realtors agree that the biggest challenge in selling the houses is the constantly changing credit requirements from banks. As credit has tightened, it has kept more low- and moderate-income people out of the housing market.

Potential buyers have to apply and be approved to buy the homes. A minimum of $1,200 monthly income is required. The income for a one-person household must be less than $58,700, and some homes require annual income of less than $24,450 for a single person. The income for a four-person household must be less than $83,900, with some designated for those earning less than $34,950.

There is also down payment assistance in some communities, from $5,000 to up to 50% of the home's purchase price.

How to apply

To apply for one of the houses, check with the community, as each has different programs. For houses in one of the 15 communities working with Home Renewal Systems, call 866-996-9754 or go to www.hrsgreen.com.

For a full article and photos, please visit the Detroit Free Press website.