Written By: Glenn Michaels, Opinion Editorial Contributor
Revitalization Areas are HUD designated geographic areas authorized by Congress under provisions of the National Housing Act. Revitalization Areas are intended to promote “the revitalization, through expanded homeownership opportunities, of revitalization areas.”
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The criteria for designating an area as a Revitalization Area relate to:
-Household Income
-Homeownership Rate, and
-FHA insured mortgage foreclosure activity.
HUD – owned single family properties in a Revitalization Area are eligible for discounted sale through special programs, including:
Asset Control Area (ACA): Foreclosed properties conveyed back to FHA that are located in a designated ACA are first offered for sale to an ACA participant. Under the ACA program , state, county and local units of government, as well as approved nonprofit organizations may enter into a two year contract with HUD requiring HUD to first make FHA properties located in an ACA exclusively for sale to the ACA participant. ACA properties with an appraised value of $25,000.00 or less may be purchased for $100.00; all other properties sold under the ACA Program are offered for sale at a minimum discount of 50 percent of the appraised property value.
The most common program in ACA is the Good Neighbor Next Door (GNND) program. Who are the eligible participants?
1. Law Enforcement: If a participant is employed full time by a law enforcement agency of the federal government, a state, a unit of general local government, or an Indian Tribal government; and carrying out such full time employment, and sworn to uphold, and make arrests for violations of federal, state, tribal, county, township, or municipal laws.
2. Teachers: If a participant is a full time teacher by a state accredited public school or private school that provides direct services to students in grades pre – kindergarten through 12. In addition the public or private school where the participant is employed must serve the students from the area where the home you are purchasing is located in the normal course of business.
3. Firefighter/emergency Medical Technicians: If a participant is employed full time as a firefighter or emergency medical technician by a fire department or emergency services responder unit of the federal government, a state, a unit of general local government, or an Indian tribal government serving the area where the home is located.
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Some additional ground rules:
At the time of the bid: The participant cannot own any other real estate. If more than one participant bids on the same property there will be a lottery to select the winning bid.
The winning participant: Must agree to reside in the subject property for three full years and own no other real estate.
A silent second is placed on the property: If the participant does everything that they have to do under the terms of the program the silent second will be wiped out.
About The Author
Glenn Michaels - As an NAMP® Opinion Editorial Contributor, Glenn Michaels is a mortgage underwriting instructor for CampusUnderwriter (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years.
