Wednesday, August 26, 2009

$50k free to buy a foreclosure?

From today's Oregonian:

"If you meet the income guidelines, the government might have a house deal for you. You may be eligible for a $50,000 interest-free loan to help move into a foreclosed home. The program, adopted by Congress last year, is aimed at preventing foreclosed houses from standing empty, bringing down neighborhood livability and property values."

I honestly don't see much downside to this program.

For the buyers you get free money, which you only have to pay back when you sell.

They are limiting it to Bank Owned properties, which limits the buyer's risk (we bought a bank owned home last year, I'll talk more about it soon) and is what I feel the best way to get a good deal on a foreclosure.

This program isn't keeping people in homes they can't afford, it's just helping keep houses from sitting vacant and gives banks an incentive to sell them at realistic prices.

Unfortunately there are only 160 bank owned houses in Multnomah county at the moment, so the pool of available properties is limited. But they are out there.

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patient renter said...

I honestly don't see much downside to this program.

It's a taxpayer subsidy of housing, the exact sort of thing that helps prevent prices from achieving equilibrium.

Banks are perfectly capable of pricing inventory to sell if they want to. They don't need taxpayer dollars to incentivize them.

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