Town in real estate

A few days after Christmas, and for the first time ever, the town of Culpeper is set to finalize its purchase of a foreclosed house on Virginia Avenue using federal recovery funds approved last year by Congress.

The town plans to hire a contractor to fix up the five-year-old, five-bedroom house before reselling it to a family of moderate means, reportedly at a discount.

In doing so, one family’s misfortune will hopefully become another family’s gain.

“We hope to keep churning and burning on this,” said Town Planner Bryan Hill during a recent interview in the house in Lakeview, a 553-home development along Sperryville Pike where construction started in 2003.

Qualified buyers are wanted for this one, and up to seven other properties the town plans to purchase and resell by September. Interested parties should contact the town planning department or Culpeper Community Development Corporation for details.

Why Lakeview?
Especially in recent years, the foreclosure rate in Lakeview has skyrocketed as subprime loans came crashing down, exacerbated by rising unemployment. In fact, Culpeper leads the state in subprime and alt-A mortgages and has neared the top in terms of its foreclosure rate.

That’s why the town easily qualified to receive $1.2 million through Congress’s Housing and Recovery Act, handed down in September through the Virginia Neighborhood Stabilization Program. The program aims to assist in redevelopment of abandoned and foreclosed homes in an effort to minimize associated problems like blight, crime and lower property values for neighbors.

This year alone, Virginia Avenue experienced at least 10 foreclosures, said Hill. A July survey of the area showed that 36 out of 200 homes — or 18 percent — were in foreclosure, according to the town’s application for the Neighborhood Stabilization grant.

Foreclosed properties in the new developments at Highpoint and Meadows of Culpeper are also eligible through the program.

Must be primary residence
The town hopes to close on the first Lakeview property Dec. 28 at a price of $180,000. The home’s original owner paid nearly $268,000 for the house in 2004, according to tax records, before losing it to foreclosure in August. In 2007, the same house was valued at $365,000.

The town cannot make a profit off the resale, but it can regain monies spent on the rehab.

Hill said the house would need new carpet, paint, ceiling fans and a refrigerator, about $14,000 worth of improvements. Along with the purchase price, a buyer can expect to pay about $194,000 for the 2,450-square-feet home.

The housing program stipulates that the property must be sold to someone for whom it will serve as a primary residence.

As for the resale from the town to a qualified homebuyer, the town has identified lenders willing to work with folks or folks can find their own lender, said Hill. Either way, the town is ready to move on it.

“We don’t want to keep (the house) very long,” Hill said. “We want that quick turnover and are hoping someone would be identified and the process rolling within 30 days of closing.”

The town has until September to participate in the program, at which time additional funds could be extended depending on need.

The federal dollars are being manned in a housing pool by the Virginia Department of Housing and Community Development.

How to apply
Sam Aitken, with Culpeper Community Development Corporation, will interview potential homebuyers for the program to determine eligibility and provide homeowner training.

In a recent release, he noted, “Houses can be purchased at a deep discount with affordable/favorable rates for lower-income buyers in need of a very nice home to live in.”

Assistance with closing costs and down payment could be available to qualified homebuyers; the level of assistance provided will be based on income.

Aitken said the process is easy and that now is the time “to come forward and select carpet and paint choices.”

Those interested in purchasing a home through the program must have an income below 120 percent of the median income.

For a household of one, that would be below $55,700; household of two, $63,650; household of three, $71,600; household of four, $79,550; household of five, $85,900 and a household of six, $92,300.

Left behind
Evidence of the displaced family eerily remained during a recent visit to the Virginia Avenue house. Inside, a still-active security system chattered in Spanish every so often. Outside, a swing set and trampoline stayed put in the backyard along with a yellow water gun under the deck and an empty charcoal bag.

“I heard a little bit about their problems paying the mortgage,” said neighbor Cassandra Hoey. “The older daughter told me, ‘We went bankrupt, we’re moving.’”

Hoey, a 20-year-old college student, said the family had three children and that the parents split up before moving out. Told about the town’s plans to purchase the yellow house next door, Hoey was skeptical.

“That’s a little weird. Is that normal?” she asked. “It’s not like it’s public domain.”

She said her family moved to Virginia Avenue in 2005 after living and moving around the world with her dad’s military career. Hoey said they picked Culpeper because it was quiet and not crowded, adding that’s not the case anymore.

“We are a little annoyed about how fast the development was,” she said. “The growth of this town is amazing and how much it’s changing the area.”

Got cash? The town does.
Real-estate agent Kristen Thompson with Montague Miller of Culpeper will represent the town in the first and coming purchases and resales of homes through the Neighborhood Stabilization program.

She said she had never been involved in a home sale to a municipality. The main difference? No financing to worry about.

“The town is buying it with cash,” Thompson said, noting that’s why the town can expect to go through closing without too much delay. “Half the waiting of buying a house is all the steps for final approval of a mortgage; they don’t have to do any of that.”

Even so, she was only “hopeful” that the Dec. 28 closing was set in stone.

Like being pregnant?
Culpeper real-estate agent Tim Kearney, with Remax, is representing the seller, HSBC Bank USA. He confirmed Dec. 28 as “the target date,” comparing a home closing to a pregnant woman’s due date in that one is never exactly sure of the timing.

“It’s more than likely it will take place on that date,” Kearney said, noting, then again it’s near the end of the year and the bank’s paperwork could be backed up, potentially causing delay.

In most foreclosure sales, the banks pick the closing costs, but not in the town’s case. Hill estimated the closing costs at around $2,000, including attorney fees and title transfer.

According to Kearney, the bank’s policy is to not pay closing costs on cash sales because it is assumed the homebuyer does not need the assistance. He expected the sale of the house to the town would be “a smooth transaction.”

Want to apply?

If you want to apply to buy a house — that is, a primary residence — at a discount through the town of Culpeper’s Neighborhood Stabilization Program, call Sam Aitken of the Culpeper Community Development Corp. at 825-7434 or Bryan Hill of the Town Planning Department at 829-8268.