A suburban Virginia county ravaged by the mortgage crisis plans to buy up foreclosed properties and aid first-time homebuyers who want to purchase them as part of an effort to shore up the local housing market.
The $11.5 million initiative by Fairfax County, Va., comes as a growing number of local governments take steps to try to ease the housing crisis.
Several cities – including Cleveland, Baltimore, Minneapolis and Buffalo – have sued investment banks and lenders, charging that their lending practices devastated neighborhoods, and hurt property values and city tax collections. Fairfax, however, is among the first municipalities planning to purchase foreclosures directly.
Plans to buy up foreclosed properties have been more common in blighted urban areas. Minneapolis has a $12 million fund to buy and fix foreclosed or vacant properties, and nonprofit housing group Habitat for Humanity has worked with several cities to rehabilitate foreclosures.
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