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Real Estate Owned (REO) Program

A home in Staten Island pre-rehab,
part of the first round of REO properties
acquired by Restored Homes
Mayor Michael Bloomberg
speaks at a press conference launching the
REO Program. Restored Homes
Executive Director Salvatore D'Avola
is second from left in the background.

In 2008, Congress passed the Housing and Economic Recovery Act (HERA), which created the National Neighborhood Stabilization Program (NSP). The NSP provides grants to states and localities for the redevelopment of foreclosed and abandoned homes. The grants are intended to prevent further declines in neighborhoods most severely impacted by foreclosures. The City of New York's Department of Housing Preservation and Development (HPD) received an allocation of $24 million in NSP funds which is being used to acquire, rehabilitate, and re-sell lender-owned, foreclosed properties throughout New York City.

Restored Homes was designated by HPD as the leading local non-profit to implement this program. Given its unique experience in redeveloping foreclosed properties, Restored Homes collaborated with HPD, the Center for New York City Neighborhoods, and the National Community Stabilization Trust (a consortium of national non-profits) and lenders/servicers to facilitate the transfer of lender-owned real estate ("REO") properties to Restored Homes. Restored Homes will then undertake the necessary rehabilitation work and sell the homes to owner-occupants, which will help alleviate the destabilizing effects that the growing stock of vacant homes is having on many New York City neighborhoods.

Under the REO Program, Restored Homes has been allocated $24 million in federal and city subsidies which will leverage $32 million in private financing. The $56 million will allow Restored Homes to purchase and redevelop 85 to100 REO properties over a 36 month period. To create the largest positive impact, the REO Program targets the areas of greatest need, based on the highest percent of foreclosures, high cost loans and lis pendens filings. Restored Homes works with community-based partner organizations to market the properties, identify eligible homebuyers, and provide them with homeownership counseling and training.

Target Neighborhoods:

• Jamaica, Queens

• Bellerose/Rosedale, Queens

• North Shore, Staten Island

• Howard Beach/South Ozone Park, Queens

• Kew Gardens/Woodhaven, Queens

• Rockaways, Queens

• South Shore, Staten Island

• Bedford-Stuyvesant, Brooklyn

• Jackson Heights, Queens

• Williamsbridge/Baychester, Bronx

• East New York/Starrett City, Brooklyn

• Flatlands/Canarsie, Brooklyn

• Mid-Island, Staten Island

Press:

"To Avert Blight, City Will Repair
and Resell Vacant Homes"
New York Times, January 14th, 2009

"Roughin´ it to roofin´ it"
New York Post, December 18th, 2011

"Home–Crisis Program Gets a Late Start"
The Wall Street Journal, January 21st, 2012

" Neighborhoods stabilized through
Restored Homes"
The Queens Courier

Downloads:

New York City REO Strategy
New York City Press Release
HUD's Neighborhood Stabilization Plan
HUD Secretary Donovan Announces REO Green Pilot Program