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"We want to fill up those empty homes and neighborhoods with stability and create, again, energy in those neighborhoods as quickly as possible. And this program is a step in the right direction," said Gov. Arnold Schwarzenegger.
Two-hundred million dollars are available under the state's Community Stabilization Home Loan Program.
That will help 800 to 1,000 first-time buyers purchase a foreclosed home with a 30-year, below-market fixed rate mortgage. There are income and sales price limits. And the property must be located in areas hit especially hard by foreclosures, like Riverside and Alameda Counties.
Not every foreclosed home in the state-designated areas can be bought under this program. Only a handful of lenders are participating and those lenders are listing only certain houses.
Still thousands of homes can be had for bargain prices.
One renter, who only wants to be identified as Nancy, is excited the dream of homeownership is within her reach with this program.
"I have not even owned a home on my own," said Nancy, a potential home buyer. "Who would have guessed five years ago that this would happen? Of course, for a lot of people, it's a tragedy. But for some people, it's a wonderful opportunity."
Even more excited about the new effort are residents who live in high-foreclosure neighborhoods. They've seen abandoned homes defaced with graffiti or just plain trashed.
"Obviously, that it was going to be distressed property and nobody would take upkeep on it. And so, it was a little bit of blight," said George Clark, who lives near a foreclosed home.
Community Stabilization Home Loans are at no cost to taxpayers because the bond the state will issue will be paid back with the new homeowners' mortgage payments.