Published Saturday, December 20, 2008
'Habitat' may buy foreclosed homes
The Times-Herald
With the help of a federal grant, Newnan-Coweta Habitat for Humanity and the Newnan Housing Authority hope to create something positive out of Coweta's foreclosure crisis.
The two groups, working as partners, hope to receive up to $2.1 million from the Neighborhood Stabilization Program Fund, part of the Housing and Economic Recovery Act of 2008.
The grant, which takes the form of a forgivable loan for Habitat, will be used to purchase foreclosed homes in Coweta County.
Most of those homes will go to Habitat, and will be sold at low cost to pre-qualified families.
About one-third of the homes will go to the Housing Authority for the family self sufficiency program. That program allows families to gradually transition from renting to home ownership.
There is also the possibility that some of the homes will be used to provide transitional housing. "That is something that we will be discussing with those in need of transitional housing," said Leslie Merriman, executive director of Newnan-Coweta Habitat for Humanity.
The grant application will actually be submitted by the city of Newnan and Coweta County on behalf of Habitat and the housing authority.
The latest deadline for the grant application is Jan. 15. The program, requirements, and deadlines have changed several times since the program was originally announced. A decision on the grant is expected by late February.
In the grant application, the two groups say they will spend up to $98,000 per home. That is a move-in cost, including any needed repairs, and transaction costs.
Most of the houses purchased will probably cost much less than that, but can be no more than the $98,000.
The grant will allow Habitat to greatly accelerate its programs in Coweta County. Right now, said Merriman, there are 13 families on Habitat's waiting list.
The families who get Habitat homes pay a mortgage, which is based on the cost of the home. Families must also put in hundreds of hours of "sweat equity" working on their own and other people's Habitat homes.
Because Habitat will be buying the homes with a forgivable loan, those mortgage payments will be rolled back in to Habitat, and will allow the local affiliate to provide many more homes for deserving low-income families than they ever have before.
"It's an extremely accelerated pace. And this is a lot different than how we normally do business," Merriman said. "But what is normal anymore? We have to adapt to what the economy and society is providing us."
The group's goal has been to put six families in new homes each year. With the grant funds, "we'll be able to hit 10 and above every year, almost immediately," Merriman said.
"We are just so incredibly excited to have this opportunity and to have the support of the city and the county," Merriman said. "It can mean an incredible change in the communities."
The government prefers that most of the funds be spent in "red areas" of high foreclosure rates. Those include the 30263 zip code, some areas near the city of Newnan, and Grantville.
So that they can hit the ground running when the money comes in, Habitat and the housing authority are on the lookout for foreclosed homes to buy.
"We've already talked with a number of banks and real estate folks about helping us identify specific homes; and frankly, the newer the better," Merriman said.
They're not looking for the worst homes, because the idea is to not have to spend months and months fixing them up.
"There's waiting lists of people to move into these homes right now," Merriman said. And doing a major overhaul and rehabilitation of a home is "more costly and more volunteer intensive than to build a home from the ground up," she said.
Merriman said she thinks the chances are very good that the grant will be awarded.
"I can't think the community enough for their support and prayers," Merriman said. "Truly, we need all of those."