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Buying Foreclosed Homes in Tennessee Under a Federal Program

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By : John Cutts    99 or more times read
Buying foreclosed homes in several communities severely affected by the collapse of the housing market has become viable in Tennessee. The initiative is made possible under the United States Department of Housing and Urban Development's (HUD) Neighborhood Stabilization Program (NSP).

The NSP was initiated to buy foreclosed houses in partnership with nonprofit housing groups in areas that will receive the federal funds. Under the program, the foreclosed properties will be rehabilitated to be sold or rented to eligible low-income and moderate-income families.

The program selects the communities that will receive the federal funds based on the area's foreclosure rate, number of vacant properties and mortgage interest rate. In Tennessee, the distribution of funds to communities will be administered by the First Tennessee Development District. Federal funding for buying foreclosed homes will be distributed to communities in Johnson City, Bristol, East Tennessee, Greenville, Sneedville, Erwin and Kingsport.

Meanwhile, First Tennessee Development District director Sherry Trent said that among the communities chosen to receive the federal funds under the program, the town of Erwin is the least in need of the aid if foreclosure rate is the basis.

She said that about $100,000 is projected to be used in the town to buy and rehabilitate two houses. The renovated properties will then be converted into apartments to be rented or may be leased as a whole, depending on the type of property purchased. Erwin will use the federal funds more on buying properties that are in danger of ruination or facing value depreciation.

Trent explained that the program will save neighborhoods from deterioration. Industry experts said that a property in a state of deterioration can pull down the value of surrounding properties in a neighborhood. They added that the primary goal of the federal program is to help stabilize neighborhoods and prevent abandoned and foreclosed properties from getting demolished.

Meanwhile, industry experts said that many properties that have been repossessed are standing empty and deteriorating by the day as grasses kept growing up in lawns. Properties under these conditions are the target homes to purchase and rehabilitate under the buying foreclosed homes program. The First Tennessee Development District is hoping to renovate the properties and made them available for rent this year.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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