Assistance for Buying Arizona Bank Foreclosed House

Posted on May 15th, 2009 in Arizona

The Arizona Department of Housing (ADOH) has launched a program that it hopes will help reduce the growing list of bank foreclosed house in the state. The Your Way Home AZ, which will be made available in 13 counties, will subsidize 22 percent of the sale price of a foreclosed property for those who are eligible for assistance.

According to Donald E. Cardon, director of ADOH, the current rise in foreclosure homes and low interest rates are reasons enough to purchase a house in Arizona.

The state’s program will subsidize 22 percent of the foreclosed property?s sale price for potential homeowners. This will give a chance for eligible Arizonans to purchase and own affordable houses and for the state to reduce its number of bank foreclosed house.

The program will be packaged as differed second mortgage loans with no interest, no monthly mortgage payment and, after a period of time, can be forgivable. Several factors that will be used as basis for a person’s eligibility for the program include ratio of debt to income, area median income, participation in a Home-buyer Education Class and the intention to use the house as primary residence.

Under the program, potential homebuyers are required to buy a repossessed single-unit detached family home, townhouse or condominium. The ADOH has allocated over $20 million to fund the assistance program.

The program was made possible by the funding under the Neighborhood Stabilization Program (NSP) of the U.S. Housing and Urban Development. The NSP was launched by the Obama Administration as part of its efforts to help stabilize communities hardest hit by the foreclosure crisis.

Arizona was ranked the fourth state with the highest foreclosure rate in April. According to market data, one in every 164 homeowners received a foreclosure filing last month.

Meanwhile, the National Association of Realtors said that the average sales price of existing houses in Tucson dropped to $176,000, from $221,000 last year.

The 20 percent decline in the median home price in Tucson was less than 50 percent of the 42 percent drop in sales price in the Phoenix metropolitan area where prices languished at $129,000.

The drastic drop in median sales prices in major cities in Arizona was attributed to the increase in the number of bank foreclosed house in the real estate market.

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