Twin Cities Suburb Stimulates Foreclosure Sales

The city of "Brooklyn Center":http://www.cityofbrooklyncenter.org/, a suburb of Minnesota's Twin Cities, is taking a unique approach to helping find new buyers for foreclosed homes, according to a report in the "Minneapolis- St. Paul _Star Tribune_":http://www.startribune.com/local/north/38201219.htmlxelr=KArks:DCiUHc3E7_V_nDaycUiD3aPc:_Yyc:aUU.
The program will provide up to $10,000 to eligible buyers of foreclosed homes. That money can be used for closing costs or down payments for vacant homes in the city, located northwest of Minneapolis. The program will be funded by a commercial tax increment financing (TIF) district.
A TIF district is a tool municipalities use to promote development. A municipality will dedicate future tax gains from the district to pay for the improvements that will generate the gains.
The money will come as an interest-free loan that is forgiven after the owner lives in the house for five years.
Brooklyn Center Mayor Tim Willson told the _Star Tribune_, "The goal is to get more single-family housing and get somebody living in foreclosed houses," said.
City manager Curt Boganey told the paper while many cities have programs to stimulate the sale of foreclosed homes, this is the first in the region that uses money from a TIF district. The project is legal because of legislation passed last year to use TIF district funds for city-wide housing programs.
Brooklyn Center has more than 27,000 residents, and there have been more than 700 foreclosures in Brooklyn Center since June 2006. The loan program is in addition to a $1.6 million housing program the city council passed last week that will take effect in March.
According to Bill Gerst, VP of public policy for the Minneapolis Area Association of Realtors, "It's an incentive program to attract new home buyers into Brooklyn Center. It's a positive, proactive way to fill up that housing stock."