NDP Affordable Housing Initiative Uses FHA 203K Program to 'Recycle' Foreclosures
Innovative Chicago program targets foreclosures as cost effective source for creating affordable housing according to Philip Elmes, President of Neighborhood Development Partners.
Chicago, IL, November 16, 2008 --(PR.com)-- Fifty-six owner occupied affordable homes are to be created across the south side of Chicago in a $7.3 million program launched in the spring of 2008 by Neighborhood Development Partners, Inc., (NDP) according to Philip Elmes, President of the Northbrook, Illinois based company.
"Distressed housing has always presented opportunities for rehabilitation as affordable housing," according to real estate developer and educator Philip Elmes. Skilled investors and rehabbers have always looked to bank owned foreclosures for rehab investment opportunities, and have developed specialized tools and skills to deal with quickly deteriorating vacant residential properties.
Foreclosures A Source for Affordable Housing
From that perspective, the glut of foreclosures coming on the market today presents an extraordinary opportunity to address the nation's urgent need for Affordable Housing, while at the same time speeding the return of vacated homes to viability. Depressed prices of these bank owned properties makes it possible to make improvements that were difficult if not impossible during the recent "bubble" driven run-up of prices. Meanwhile, according to Elmes, market values in many urban markets – notably Chicago and Milwaukee – have not dropped significantly.
Given these factors, sophisticated real estate investors and rehabbers share with stock market investors the philosophy "when everyone else is selling, it's likely time to buy." This buying activity goes on today, particularly in mid western urban real estate markets where "discounts" of 20-40% off of market value are not uncommon.
In announcing the NDP Affordable Housing Initiative, Neighborhood Development Partners is teaming with entrepreneurs drawn from the NDP Urban Rehabber Program™ to bring these homes to market. This proprietary real estate training program was developed nearly ten years ago by career real estate broker and developer Philip Elmes.
Beginning in early 2000, the Urban Rehabber Program has trained over a thousand newcomers to real estate dealing and rehab. Thousands more have participated in Saturday morning Urban Rehabber Roundtables held monthly on Chicago's south side. It is conservatively estimated that Program participants have acquired and rehabbed well over 1000 homes in the metropolitan Chicago market since 2000. (For more, see UrbanRehabber.com.)
FHA 203K Program Supports Home Ownership
The newly streamlined FHA 203K rehab lending program offers an efficient and economical financing resource for the NDP program, according to Elmes. Working with the the 203K program introduces the prospective home owner into the process at the earliest possible time, realizing significant cost savings to both buyer and developer.
The 203K program eliminates need for 2-stage financing, where the developer borrows to purchase and improve the property before identifying a buyer who, in turn, must secure financing. Here there is full disclosure: the borrower knows what is being paid for the property initially, and participates in developing the Scope of Work that determines what is to be done to improve the property.
Importantly, the 203K program provides the prospective home owner reassurance that the required work is performed properly (subject to FHA oversight), and comfort in the knowledge the mortgage loan itself is equivalent or superior in its terms to that available anywhere.
Not every home completed under the NDP Affordable Homes™ initiative will require FHA financing. Over the years NDP and its partners and students have always avoided subsidized programs or governmental subsidies. Conventional financing and free market protocols have always defined their efforts, according to Elmes.
"With the opportunities out there coming to us by virtue of the sub-prime debacle, any real estate entrepreneur worth his or her salt should be able to prosper while serving the urgent needs of their community for affordable housing. It's a wonderful opportunity for all concerned," Elmes says.
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"Distressed housing has always presented opportunities for rehabilitation as affordable housing," according to real estate developer and educator Philip Elmes. Skilled investors and rehabbers have always looked to bank owned foreclosures for rehab investment opportunities, and have developed specialized tools and skills to deal with quickly deteriorating vacant residential properties.
Foreclosures A Source for Affordable Housing
From that perspective, the glut of foreclosures coming on the market today presents an extraordinary opportunity to address the nation's urgent need for Affordable Housing, while at the same time speeding the return of vacated homes to viability. Depressed prices of these bank owned properties makes it possible to make improvements that were difficult if not impossible during the recent "bubble" driven run-up of prices. Meanwhile, according to Elmes, market values in many urban markets – notably Chicago and Milwaukee – have not dropped significantly.
Given these factors, sophisticated real estate investors and rehabbers share with stock market investors the philosophy "when everyone else is selling, it's likely time to buy." This buying activity goes on today, particularly in mid western urban real estate markets where "discounts" of 20-40% off of market value are not uncommon.
In announcing the NDP Affordable Housing Initiative, Neighborhood Development Partners is teaming with entrepreneurs drawn from the NDP Urban Rehabber Program™ to bring these homes to market. This proprietary real estate training program was developed nearly ten years ago by career real estate broker and developer Philip Elmes.
Beginning in early 2000, the Urban Rehabber Program has trained over a thousand newcomers to real estate dealing and rehab. Thousands more have participated in Saturday morning Urban Rehabber Roundtables held monthly on Chicago's south side. It is conservatively estimated that Program participants have acquired and rehabbed well over 1000 homes in the metropolitan Chicago market since 2000. (For more, see UrbanRehabber.com.)
FHA 203K Program Supports Home Ownership
The newly streamlined FHA 203K rehab lending program offers an efficient and economical financing resource for the NDP program, according to Elmes. Working with the the 203K program introduces the prospective home owner into the process at the earliest possible time, realizing significant cost savings to both buyer and developer.
The 203K program eliminates need for 2-stage financing, where the developer borrows to purchase and improve the property before identifying a buyer who, in turn, must secure financing. Here there is full disclosure: the borrower knows what is being paid for the property initially, and participates in developing the Scope of Work that determines what is to be done to improve the property.
Importantly, the 203K program provides the prospective home owner reassurance that the required work is performed properly (subject to FHA oversight), and comfort in the knowledge the mortgage loan itself is equivalent or superior in its terms to that available anywhere.
Not every home completed under the NDP Affordable Homes™ initiative will require FHA financing. Over the years NDP and its partners and students have always avoided subsidized programs or governmental subsidies. Conventional financing and free market protocols have always defined their efforts, according to Elmes.
"With the opportunities out there coming to us by virtue of the sub-prime debacle, any real estate entrepreneur worth his or her salt should be able to prosper while serving the urgent needs of their community for affordable housing. It's a wonderful opportunity for all concerned," Elmes says.
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Contact
Neighborhood Development Partners, Inc.
Philip Elmes
312.305.0533
urbanrehabber.com
Philip Elmes
312.305.0533
urbanrehabber.com
Contact
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