The San Francisco unit of housing nonprofit Habitat for Humanity has launched its first-ever program to help reduce the glut of foreclosed homes for sales in the Bay Area and at the same time help underserved families acquire an affordable home.
Habitat for Humanity has started the program with a $1 million funding and has acquired its first unit from foreclosed homes for sales for $225,000.
The San Francisco unit of Habitat said it will start in San Mateo County because it has some cities with exceptionally high number of foreclosed homes for sales like Menlo Park and East Palo Alto. Habitat organizers said they plan to buy and fix foreclosed houses one at a time.
The first foreclosed house Habitat acquired is a 900-square-foot house in the Belle Haven neighborhood of Menlo Park. Its outstanding loan in February 2006 was $675,000, but Habitat was able to buy it for only $225,000.
Phillip Kilbridge, head of Habitat’s San Francisco chapter, said Habitat will spend about $40,000 to repair and improve the house and then sell it to a low-income family.
The 900-square-foot house is one of 5 foreclosed homes for sales that Habitat plans to buy and fix in the Belle Haven area of Menlo Park.
Kilbridge said Habitat’s restoration efforts will also bring hope into the Belle Haven neighborhood which has been clobbered with a foreclosure rate six times more than the foreclosure pace in other San Mateo County neighborhoods.
Kilbridge also added that Belle Haven families who are qualified to buy restored foreclosed homes for sales under the new Habitat program are those that are earning between 40 and 60 percent of Belle Haven’s median income. They must have good credit and must be able to make monthly payments.
The families who are buying are also required to share in the actual work of transforming the foreclosed property. They must put in at least 500 work-hours, which will be considered as their sweat equity and down payment, according to Habitat construction chief Ed Lehmer.
Habitat will hold the mortgages and qualified families will pay zero-interest loans. There are already 67 families who applied for the Habitat program.
Andy Cohen, councilmember of Menlo Park, said Menlo Park is supporting Habitat’s program by providing $100,000 for each of the five houses to be fixed by Habitat in Belle Haven. Cohen said there are around 60 foreclosed homes for sales in the Belle Haven neighborhood.
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