Program to Ease the Impact of Residential Foreclosures in Denver
The Denver Office of Economic Development (OED) recently received $25 million in funding to launch a Mortgage Credit Certificate Program to prevent foreclosures and spur the revitalization of neighborhoods impacted by foreclosure. The program, to be launched in May, is funded through $15 million from Denver’s Private Activity Bond capacity and $10 million from the State of Colorado PAB capacity provided through the Housing and Economic Recovery Act of 2008.
“This important new tool will provide relief to homeowners potentially facing foreclosure as well as boost the turnaround of foreclosed properties,” said André Pettigrew, OED executive director. “The certificates will work in tandem with the federal Neighborhood Stabilization Program to help mitigate the problems we’re experiencing in neighborhoods where homes have fallen into foreclosure or abandonment.”
The certificate program will target homeowners with high-cost or sub-prime loans that are at risk of foreclosure. Additionally, the program will benefit purchasers of foreclosed homes that will be acquired and rehabilitated by the City through the Neighborhood Stabilization Program (NSP). OED expects to assist approximately 180 households through the Mortgage Credit Certificate Program.
Created through the Housing and Economic Recovery Act of 2008, the NSP is providing Denver with approximately $9.6 million to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight. Federal guidelines require that program funds be implemented in areas that have experienced the greatest incidence of residential foreclosures. In Denver, these neighborhoods include Green Valley Ranch, Montbello and Westwood. Additional neighborhoods may be added to the program, contingent upon additional federal NSP allocations and the leveraging of funds with partnering organizations.
A Mortgage Credit Certificate provides residents with a tax credit for a portion of their annual mortgage interest. Unlike an itemized deduction, the credit enables qualified owners or buyers who owe federal income taxes to benefit from a dollar-for-dollar reduction of their tax bills.
The Denver Office of Economic Development (OED) works to create a local environment that stimulates balanced economic growth through job creation, business assistance, housing options and neighborhood redevelopment.