Says City Will Establish Fund Designed to Encourage Continued Neighborhood Stabilization

Mayor Thomas M. Menino today announced that the City of Boston would receive $4.2 million in federal funds from the Department of Housing and Urban Development as part of the “Economic and Housing Recovery Act of 2008,” passed by Congress in July. The financial support will allow Boston to establish a Foreclosed Property Reclamation Fund, designed to stabilize those neighborhoods disproportionately affected by foreclosures.  

“The City of Boston will put this money to work right away building on the actions we have already taken to address foreclosures and abandonment in the high foreclosure neighborhoods of our City,” said Mayor Menino. “We’re grateful to Congressman Frank and our congressional delegation for understanding the severity of the situation and for bringing us some relief from Washington.”

Boston is one of many hard-hit communities across the country to benefit from the $3.92 billion legislation that will deliver Community Development Block Grant (CDBG) funds to states and local governments for the redevelopment of abandoned and foreclosed homes.

Menino, who joined Congressman Barney Frank and other U.S. mayors at a congressional hearing last April to testify in support of direct federal assistance to cities with high rates of foreclosure, said city officials began discussing possible uses for the funding when the Act was passed to ensure any additional programming could be implemented immediately.

Boston’s Foreclosed Property Reclamation Fund will make possible the continued acquisition of bank-owned properties by the City or by private developers in those neighborhoods hardest hit, and will allow for the provision of technical and rehabilitation assistance to new homeowners of foreclosed properties, or to those interested in purchasing a foreclosed property. Menino said the funds would be administered through the City’s Department of Neighborhood Development.

Last February, Menino formed the “Foreclosure Intervention Team (FIT),” an interagency effort among city departments to share information in order to prevent foreclosures and associated blight in areas of Boston that have increased foreclosure activity.

Since then, the FIT has facilitated the purchase by the City of four properties on Dorchester’s Hendry Street that have long-since been abandoned. A Request for Proposals was issued last spring, and the City has since designated local developer, Bilt-Rite Construction, to redevelop the properties and return the 12 units to Boston’s housing stock. Menino said construction would begin on Hendry Street in the next two weeks.  

The City’s Foreclosure Prevention Initiative took off in late 2005, as the Department of Neighborhood Development tracked an unusual spike in foreclosures rates. Between 2006 and 2008, Boston has been affected by approximately 1650 foreclosures. During the same time period, however, the City has been able to help more than 385 homeowners avert foreclosure, preserving an estimated $65 million dollars in home values.

Homeowners with questions about foreclosure prevention or the programs and services available to them are encouraged to call the Boston Home Center at 617.635.HOME (4663) or visit DND’s website at www.cityofboston.gov/dnd.

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