More than 225 people attended the two-day kickoff of an effort by housing groups to encourage the purchase and renovation of 7,500 metro Atlanta homes over five years to rebuild neighborhoods after the foreclosure crisis. A group advocating for the cause says that achieving that target would create jobs, help fill neighborhoods with homeowners and increase property values – without the use of local tax dollars.
“We are thrilled at the initial response, which included 175 families who came out on a wet Saturday to tour homes at various stages of renovation,” said Derrick Duckworth, leader of Committed to Communities, a group of realtors, lenders and non-profits. “The time is right for purchase and renovation. The rebound of the housing market has inventories at early 90s levels, and builders have returned. Competition is getting fierce. This option can expand the housing inventory by tens of thousands of homes.”
Included in the call to action were the Atlanta Neighborhood Development Partnership and Resources for Residents and Communities, both network members of NeighborWorks America, along with Invest Atlanta and Lifecycle Building Center.
Courtney Martin, a prospective homebuyer attending the kickoff, was encouraged.
“After the event, I felt hopeful about my ability to purchase a home in the city,” said Martin. “As a teacher, I wasn’t sure if that would be possible. Now with this helpful information, I will seriously consider purchasing a home that needs renovation.”
The groups’ two-day educational event in the Adair Park neighborhood took place August 16 and 17. On Friday some 50 community leaders, including Atlanta City Council President Ceasar Mitchell and HUD Regional Director Ed Jennings, had a preview. That was followed by the house tour on Saturday.
On both days, homes in the before, during and after phase of purchase and renovation were on display.
“Purchase and renovation won’t cost local governments a cent and it’s badly needed,” said John O’Callaghan, president and CEO of Atlanta Neighborhood Development Partnership. “Despite a 40 percent improvement since the depth of the recession, Atlanta still has the dubious distinction of having the fifth highest vacancy rate among major cities, and Georgia was No. 5 in the nation in foreclosures last year.”
The most common way to purchase and renovate homes is through what are known as 203(k) loans, guaranteed by the federal government and known by their HUD designation. With one mortgage, buyers can buy the home and obtain financing for renovation to meet their specific needs. A down payment of 3.5 percent is required and with today’s low mortgage rates the loan is simpler and often more affordable than separate purchase and construction loans.
The group’s goal is to promote resource efficiency in buildings by salvaging and reusing materials instead of sending them to landfills, thus reducing environmental impact and providing substantial cost savings. They say that not only does the option revive homes, but it also creates the chance to reuse materials. Thus on both days the nonprofit Lifecycle Building Center demonstrated the use of reclaimed building materials by setting up salvaged product displays in one home.
“Sustainability of our housing stock is another important reason to consider purchase and renovation,” said Jill Arrington, CEO of Resources for Residents and Communities, The loans may take a little more time, but with the federal guarantee and low down payment, and the chance to get exactly the home you want, they’re worth it.”
Frank George of Invest Atlanta noted other advantages.
“Purchase and renovation will create badly needed jobs. Also, homebuyers in the city of Atlanta can use NeighborhoodLIFT money for purchase and renovation, with up to $15,000 available for each home and more than $2 million still available. We think homebuyers should expand their horizons by considering this.”
They promised to continue their education efforts and pointed out that Atlanta is already a leader in purchase and renovation across the country, but the area can do much more.
Last year, they noted, metro Atlanta completed 927 federally backed purchase-renovation loans, up from 282 in 2008. Metro Atlanta had more purchase-renovation loans than Chicago, Washington, D.C., Dallas or St. Louis.
“Given trends and the improvement of the housing market, an average of 1,500 homes a year is very doable,” Duckworth said.
Jennings, the HUD regional administrator, was supportive.
“It’s encouraging to see such an impressive collaboration in support of this – all to help restore our neighborhoods,” he said. “We agree that 203(k) loans can be an ideal solution for those who have their heart set on a specific home in a specific neighborhood, but also need money for restoration. HUD stands ready to work with these families and neighborhoods for continued recovery in the housing sector.”