Arizona City to Buy and Fix Foreclosed Houses

The Arizona city of Phoenix will address the growing foreclosure problem in the area by purchasing and renovating foreclosed houses and selling them to Latino families in low and middle income bracket.

The project is partly funded by Citi Foundation, the charitable unit of Citigroup. The foundation will provide about $1.75 million to the National Council of La Raza (NCLR) to purchase foreclosed houses in Phoenix, fix and sell them to Latino families belonging in the low and middle income levels.

The NCLR will allocate $235,000 from the Citi Foundation funding to its Raza Development Fund which will be used to buy foreclosed houses, rehabilitate and maintain and then lease or sell them.

Eric Eve, vice president of community relations at Citi Foundation, said that the next phase of the repossession crisis is working with nonprofit agencies such as NCLR to help rebuild, strengthen and stabilize communities severely affected by the current foreclosure problem.

The foundation fund is expected to purchase about 30 foreclosed houses or bank owned homes in the southwest area of Phoenix until next year. Eve said that if done right, the $235,000 Raza Development Fund would come a long way in helping many areas across the country.

Raza Development Fund chief executive officer and president Tom Espinoza said that the Citi funds will be incorporated into the federal stimulus money that is expected to be awarded before the end of this year or early next year and the $4 million fund he manages.

The stimulus money from the federal government will boost the total fund to almost $12 million to be used to target vacant and foreclosed properties. The initial phase of the project will focus on metropolitan Phoenix’s three Hispanic neighborhoods hardest hit by the foreclosure crisis, namely West Valley, Sunnyslope and South Mountain.

Also involved in the projects are NCLR affiliate organizations and banks that hold inventory of foreclosed properties. Chicanos Por La Causa head Edmundo Hidalgo said that the project could help over 1,000 properties or families. The Chicanos Por La Causa is one of the national affiliates of La Raza.

Hidalgo said that prices of foreclosed houses in target neighborhoods range from $60,000 to $100,000, adding that the almost 50 percent drop in property values would enable eligible families to obtain loans now.