Urban Blight is Still a Problem. The Solution? You.

Abandoned homes, and urban blight are a huge problem in the city of Philadelphia. This article published by Philly.com about 6 months ago, highlights how gentrification, and urban blight go hand-in-hand. Philadelphia is a city that is constantly changing. Our population is increasing, while our supply of commercial and residential spaces struggles to rise to meet demand.

By recognizing the problem of urban blight, we can report it, and do something about it. I, personally, would like to see Philadelphia become a city that we can all take pride in. Not just a city of socially stratified neighborhoods.

Daily News Graphic

Battling blight & vacant properties: Philadelphia’s unwelcome real estate legacy | Radio Times | WHYY

Philadelphia’s vast tracts of vacant land and abandoned buildings – about 40,000 properties by one count – are costing the city, and taxpayers, a fortune. A new study (pdf) by Econsult and two partners found that the blighted properties were depressing the city’s property values by billions of dollars, while directly costing city agencies $20 million a year. We’ll talk to Econsult’s RICHARD VOITH, lead author of the report done on behalf of the Philadelphia Redevelopment Authority and the Philadelphia Association of Community Development Corps. We’ll also talk to JOHN KROMER of the University of Pennsylvania’s Fels Institute of Government, who recently prepared a report (pdf) updating the status of vacant properties in Eastern North Philly that he first inventoried as the city’s Office of Housing and Community Development in 1998. Those properties redeveloped by the Asociación de Puertorriqueños en Marcha represent a rare success story.

via Battling blight & vacant properties: Philadelphia’s unwelcome real estate legacy | Radio Times | WHYY.

FHA Extends “Anti-Flipping” Waiver to Speed Sales of REO Homes

Is this waiver a good idea or will it increase blighted properties?

From DSnews.com

01/28/2011 By: Carrie Bay

The Federal Housing Administration (FHA) announced Friday that it is extending the suspension of its ‘anti-flipping rule’ through the remainder of 2011.

FHA Commissioner David Stevens says the temporary waiver will accelerate the resale of foreclosed homes in neighborhoods that are overrun with abandoned properties and blight. The move is intended to help stabilize home values and improve conditions in communities experiencing high foreclosure activity.

FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days, but in February of last year, FHA temporarily waived this regulation through January 31, 2011, noting that in today’s foreclosure-ravaged marketplace, the agency’s research has shown that acquiring, rehabilitating, and reselling distressed properties often takes less than 90 days.

With the sunset date for that first extension just days away, FHA posted a notice on Friday extending the waiver through December 31, 2011. This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” Stevens said. “Today I can report that this policy change has been effective.”

Stevens says since the original waiver went into effect, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days.

FHA said it the notice that prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days would adversely impact the willingness of sellers to consider offers from potential FHA buyers, because the seller must also factor in holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

“Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties,” Stevens added. “This action enables our borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently been rehabilitated. It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout this country.”

The waiver contains strict conditions and guidelines to protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices. The agency’s anti-flipping waiver is limited to those sales meeting the following criteria:

  • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
  • In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
  • The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.