Our Work in Foreclosure RecoveryThe foreclosure crisis has affected communities and neighborhoods on multiple fronts.
Communities are confronted with thousands of vacant, foreclosed properties that depress property values and threaten to blight entire neighborhoods. Depressed property values have resulted in decreased tax revenue, forcing local and state governments to slice deep into their budgets and the social services that have provided safety nets to vulnerable families.
To address this complex problem, Enterprise supports national and local strategies that incorporate:
- collaboration among governmental, for-profit and nonprofit organizations;
- target neighborhoods in need and focus resources in these locations; and
- develop financing solutions where public dollars leverage private investment.
National ImpactInnovation for Long-Term Solutions
As the foreclosure crisis continues to reveal its breadth and depth, Enterprise is looking for solutions that innovate for long term, systemic change. Millions of single-family properties stand vacant and represent an opportunity for affordable housing through quality rental housing and sustainable homeownership. Enterprise is engaging national and local partners to explore new models that provide true housing choice for all members of a community.
- In an effort to address ongoing foreclosures and vacancies in impacted communities, Enterprise has partnered with Oakland, CA based Waypoint Enterprises to convert distressed single-family homes into affordable rentals for low-income families. Starting in Oakland, Waypoint will acquire, convert and manage the homes while Enterprise will work with the City and local non-profits to find and support prospective tenants with financial counseling and other services.
- Enterprise, in partnership with Mercy Housing, the National Community Stabilization Trust and the Housing Partnership Network, created the Mortgage Resolution Fund (MRF) to purchase distressed mortgage notes using Federal Hardest Hit Funds. In June, the FHA announced its Distressed Asset Stabilization Program (DASP) to sell distressed FHA mortgage notes. MRF will be able to access these homes via a special neighborhood stabilization pool within DASP that encourages investment in the hardest hit communities.
- To address the challenges local governments, nonprofits and mission-driven for-profit entities face accessing foreclosed properties - Real Estate Owned (REO) - in their communities, Enterprise formed the National Community Stabilization Trust in partnership with NeighborWorks America, Housing Partnership Network, Local Initiatives Support Corporation, National Council of La Raza and the National Urban League. The Stabilization Trust facilitates the transfer of properties from servicers through the use of targeted data and provides acquisition and rehabilitation financing for deals that would not otherwise be funded.
- Enterprise continues to participate in the steering committee of the National Foreclosure Prevention and Neighborhood Stabilization Task Force, a cross-industry group of local and national organizations working to bring together advocates, practitioners, and other experts from across the country around foreclosure prevention and neighborhood stabilization efforts. The Task Force supports the exchange of critical information to help craft policy, legislative, and programmatic initiatives that primarily support low and moderate-income individuals and families.
Enterprise worked closely with affordable housing stakeholders to raise awareness of the foreclosure crisis and its devastating impact on neighborhoods. The Housing and Economic Recovery Act (HERA) of 2008 (H.R. 3221) was signed into law on July 30, 2008, and included the Neighborhood Stabilization Program (NSP) which received $3.92 billion in emergency funds. Enterprise worked closely with HUD, the House Financial Services Committee and the Senate Banking Committee to develop and refine regulations governing the NSP program.
Enterprise was one of several key leaders in securing an additional $2 billion for a second round of NSP funds in the American Recovery and Reinvestment Act (ARRA) of 2009 to support states, localities and nonprofits. In 2010, Congress allocated an additional $1 billion for NSP3 in the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Enterprise has been an active participant in national collaborations, and has supported local collaboratives as a strategy for addressing the unique complexities of foreclosure response and community revitalization. Examples include:
- Building America’s Cities Toolkit: Enterprise partnered with the Center for Community Progress to develop the Building America’s Cities Toolkit to help municipalities and CDCs think through strategies for dealing with problem properties. The toolkit identifies resources and case studies that employ successful practices across the industry.
- Piece By Piece Regional Foreclosure Initiative: A partnership of 140 organizations in the 10-county metro Atlanta area, Piece By Piece provides up-to-date status of Metro Atlanta’s foreclosure crisis and ways to take action to help address it, offers opportunities for coordination and best practice sharing; and encourages public commitments on three to five year goals that will be taken to address the crisis.
- East Bay Collaborative: A partnership of nonprofits and local governments located in the San Francisco East Bay Region that focuses on best practice sharing and developing shared capacity. A joint marketing program and online sales platform was developed that serves all East Bay NSP programs increasing the number volume of interested homebuyers purchasing rehabilitated properties.
The strategic use of capacity building grants is helping local community development corporations expand their ability to respond to the challenges and opportunities created by the foreclosure crisis on the ground. Examples include:
- Greater Rochester Housing Partnership (GRHP) : Received funding to prepare and implement a cost study to refine and expand the HOME Rochester program that has acquired, rehabilitated and sold over 550 foreclosed properties over 10 years . Building on this work, GRHP received additional support to design a business plan for a landbank and to prepare an application for approval from New York State. The landbank is part of a larger effort by GRHP to target vacant and blighted properties owned by irresponsible investors.
- Neighborhood Progress: Released a report Rebuilding Markets: Single Family Redevelopment through Non-profit and For-profit Partnership from an Enterprise grant. The study looked at two Cleveland organizations, Detroit Shoreway Community Development Organization and Slavic Village Development, who are experimenting with unique approaches to housing renovation that require little or no subsidy.
- Housing Trust of Santa Clara County (HTSCC): Received funding for their Lease-to-Own-Again (LTOA) program. LTOA provides families facing foreclosure an opportunity to stay in their home as a renter, with the goal of buying back their home in the future. An initial Enterprise grant supported a feasibility study while a pending award will fund implementation of the pilot program.
Transforming Blighted Properties
Greater Rochester Housing Partnership’s HOME program, with support from Enterprise grants, has transformed nearly 600 foreclosed properties into fully renovated affordable homes.