Fannie Mae is partnering with the city of Detroit to rehabilitate or demolish a number of vacant Fannie-owned foreclosures in the city, as part of an effort to aid in the stabilization of some the city’s neighborhoods hardest hit by foreclosures.
In what the parties are calling an “initial transaction,” Fannie announced that it will sell 44 foreclosed properties to the Detroit Land Bank Authority “for a nominal fee,” and contribute funds for the demolition of some of the properties.
According to Fannie, 26 of the properties are slated for rehabilitation and 18 of the properties will be demolished.
“Vacant properties are a strain on the neighborhood and can depress property values for other homeowners,” said P.J. McCarthy, Fannie Mae’s vice president of alternative dispositions and real estate asset management.
“We are happy to partner with the Detroit Land Bank Authority to help transform these properties into homes for local families, or new community spaces. It is our goal to continue to work closely with local organizations to help bring life back into these neighborhoods. We look forward to additional transactions with the Detroit Land Bank.”
The Detroit Land Bank has been increasingly active in fighting blight in the city in recent weeks.
Recently, the Land Bank acquired 6,000 foreclosed homes after a nearly $3.2 million deal between the city of Detroit and Herb Strather collapsed because Strather, a local casino and real estate developer, wanted to keep some of the best parcels of land for his investment fund and wanted the city to use federal funding to demolish many of the foreclosed homes.
The cost to demolish those homes was estimated to be more than $24 million.
After the deal fell apart, those homes were also turned over to the Detroit Land Bank, which will take the lead on the rehabilitation process for those homes.
The Detroit Land Bank said that the deal for the Fannie-owned homes is just part of its ongoing efforts to revitalize the city.
“This deal with Fannie Mae is a very important piece of the Detroit Land Bank’s larger strategy to stabilize neighborhoods through our auction program, demolition, and side lot sales,” said Detroit Land Bank Authority Kevin Simowski.
“The Detroit Land Bank is working with multiple financial institutions on similar deals so we can address every vacant house in our target neighborhoods.”