The second biggest institutional philanthropist in the country is planning to pour millions into a nonprofit project that it hopes will alleviate the housing crisis.

Ford Foundation announced its $50 million grant to a consortium that will trim down the process for municipalities buying foreclosed homes from financial institutions. In this manner, it hopes to curb the decline in real estate value that has troubled U.S. neighborhoods for the last two years.

The $50 million funding will go to a consortium of community-based nonprofits called the National Community Stabilization Trust, which will serve as intermediary between municipalities trying to rehabilitate neighborhoods and mortgage servicers looking to dispose foreclosed properties. The trust serves two purposes. It wants to negotiate discounted prices on foreclosed homes with major financial institutions before being listed, and it seeks to finance municipalities and groups interested in buying distressed properties.

Municipalities that want to rehabilitate neighborhoods are having trouble in negotiating with financial institutions. However, with the trust as the intermediary, the sale of foreclosed property is simplified and accelerated, saving financial institutions time and marketing costs. In addition, it will work alongside state and local governments and special grantees of the Department of Housing and Urban Development to purchase and redevelop foreclosed homes.

Projects dealing with foreclosure have somewhat become a trend. An Orange, NJ-based nonprofit Housing & Neighborhood Development Services Inc recently bought 47 mortgages from J.P. Morgan Chase that it will renovate and eventually sell. Another nonprofit, the Center for New York City Neighborhoods provides counseling and legal services for homeowners threatened with foreclosure.

Ford’s new president, Luis Ubinas, admits the project is dangerous, but believes that the only way to clear over a trillion in real estate is to work out a market-based solution.

Before the end of the year, the trust hopes to speed up purchases in over 100 cities and raise some $400 million. Adding to this effort, Ford intends to invest an additional $100 million on housing over the next five years.

Post Author: guest

This entry was posted on Friday, June 26th, 2009 at 11:31 am and is filed under Philanthropy News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.