MEDFORD, Ore. — Medford resident Tom Ellis had mixed feelings of joy and dread when his $192,000 offer on a foreclosed house in east Medford was accepted by the owner bank.
“I was happy I found a suitable house in the right neighborhood, but what do I do now?” Ellis says. “I need money to fix it up.”
Soon after that, Ellis found a newspaper article about the new federal Neighborhood Stabilization Stimulus Program in the break room at his workplace.
The grant program, part of the American Recovery and Reinvestment Act, provides financial assistance to low- and middle-income residents who are purchasing a foreclosed home.
“I thought, ‘Holy cow! I’m buying a foreclosure,’ ” Ellis says.
Ellis immediately contacted his loan officer at Bank of America to ask about applying for the program.
Less than two months later, Ellis was the first neighborhood stabilization grant recipient in the state of Oregon. He was awarded about $50,000 to put toward the purchase of the home or home repairs and upgrades.
“It takes a lot of pressure off buying a house,” says Ellis, who is an appliance salesman. He says the grant would help reduce his monthly payment by about $200 per month.
“We’re pretty excited,” he adds.
Ellis, his wife, Tan, who have a 2-year-old son, Michael, were expected to close on the property soon.
“It’s kind of exciting because it’s the first house purchase in the state using the program,” says Louise Dix, who helps administer the grant for Medford city government. “Hopefully, it will go off without a hitch.”
The city has received $459,260 in federal neighborhood stabilization funds to divvy out in the next two years. The funds may be used for the purchase price of a foreclosed home or to repair the property, all in an effort to keep homes occupied and prevent neglect and neighborhood blight often associated with foreclosures.
Nationwide, about $4 billion is available through the program. Oregon’s share is about $19.6 million. The money was allocated based on the number and percentage of foreclosures, homeowners behind on mortgage payments and the number of subprime mortgages.
In Medford, about $114,814 is required to go to low-income families, those who earn 50 percent or less of the median income. That equals about $27,700 annually for a family of four in Jackson County.
The rest of the funds may go to people who earn up to 120 percent of the county’s median income, about $66,500 or less annually for a family of four.
The Ellis family earns well below 120 percent of the area median income but is above the 50-percent point, says their real estate agent, Sandra Schell.
Other grant criteria require that the house’s sale price must be 1 percent less than the assessed value, and that buyers attend a homebuyer education program.
Ellis says he attended a class called the A-B-Cs of Home Buying at Rogue Community College in Grants Pass.
Applicants apply through the bank from which they’re obtaining a loan, Dix says. Most banks have been informed of the program, but others have had to be tutored through the process because the program is so new, Schell says.
The buyer must live in the house for at least five years in order to redeem full equity when the property is sold, Dix says.
More program funds should be available to homebuyers in the next month, according to Oregon Housing and Community Services.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
