In an effort to ward off the rising tide of vacant homes, the city of Minneapolis is offering forgivable $10,000 loans to qualified buyers purchasing homes in one of the city’s 18 eligible neighborhoods. The zero-interest, zero-payment loans are forgiven at a rate of 20 percent each year.
Located mostly within the central South and North communities (with the exceptions of Beltrami and a thumbnail in Northeast), homes eligible for the Minneapolis Advantage loans are in neighborhoods where vacant homes make up at least 1.44 percent of all homes. The total number of vacant/boarded houses in Minneapolis is at nearly 1,000 and rising. Two years ago the city was afflicted with only 250 abandoned homes.
McKinley, Webber-Camden, Harrison, and Folwell neighborhoods are offering buyers an additional $4,000 in mortgage assistance, and Harrison is adding another $15,000 for renovations. That makes $29,000 in forgivable loan money to fix up an abandoned home in that neighborhood.
What does that mean for you, dear buyer? It means that if you have good credit and snare a city loan, you can score this “rehab opportunity” house (pictured above) for a mere $2,900, which originally sold a decade ago for $57,000, according to Hennepin County records. Or you can get a North Side home, which originally sold for $90,000 six years ago, for free.
And what does this mean for you, dear homeowners? Well, nothing. Median home prices continue to drop (10 percent from March 2007 to March 2008). Negative equity continues to rise. And short sales — making an agreement with the lender to sell the home for reduced market value — continue to constitute most real estate activity. In other words, for those who are getting hurt the worst by the foreclosure fallout, there is no easy solution.