Indianapolis Considers Buying All HUD Foreclosures in 3 Zip Codes
February 10, 2008
Investors in some Indianapolis zip codes may soon find it difficult to purchase HUD homes for sale. A HUD manager is urging city officials to purchase all HUD homes on the market in three zip codes and then sell the properties to low- and moderate-income families. IndyStar.com reports:
“Charles Gardner, a senior HUD manager in Atlanta, where this program is operated, proposed that Indianapolis buy and resell all the houses repossessed by his agency in the three ZIP codes.
HUD takes possession of houses when the borrower defaults on mortgage loans insured by the Federal Housing Administration. Last year, FHA guaranteed about 20 percent of the mortgage loans foreclosed on in metro Indianapolis, Hall said.
Rufus “Bud” Myers, executive director of the Indianapolis Housing Agency, said the potential supply of private housing for Section 8 has been reduced because so many houses are off the market while they go through the foreclosure process. IHA oversees the Section 8 housing program for 27,000 people.
In a letter sent in November to Alphonso Jackson, HUD secretary under President Bush, Myers contends the federal agency is a prime supplier of houses to investors looking for properties to flip. Myers asked that HUD stop selling houses it has taken over in the 46201, 46203 and 46218 ZIP codes.
HUD typically repossesses 80 houses a month in the three ZIP codes. It has about 45 houses in those ZIP codes for sale by its contractor, Hall said.”
Selling HUD homes to high-bidding investors shouldn’t be considered a bad thing - most investors fix up these properties before selling them, improving value of the home as well as the local the neighborhood. If you’re considering purchasing a HUD home in Indianapolis, better bid quickly. You may not have the chance if this proposal is accepted.
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