NORTH AURORA – Contractors recently began working to turn a long-neglected foreclosed house, tucked in the curve of a cul-de-sac on Cedar Drive in North Aurora, from an “eyesore” back into a livable home, worthy of purchase.
Workers carried out shovels full of old insulation, pieces of the roof that caved in and old ceiling tiles, and put them into a construction dumpster. Others used crowbars to pull out rotted, crumbling window frames. Another group tore down a wall to take a converted fourth bedroom back to its original purpose as a one-car attached garage.
Property records show it was purchased in June 2004 for $131,200.
The former owners bought the house intending to “flip” it, neighbors said, but when the market collapsed and they could not refinance, they left it to the bank.
Court records show it was foreclosed in December owing nearly $70,400.
Because of its long-term neglect – it needs to be gutted – no private buyer would invest in this fixer-upper, said Josh Beck, assistant director for Kane County Community Development. So federal dollars will turn the house into a home again, through the Kane County Foreclosure Redevelopment Program, he said.
“This is a house we bought off the market,” Beck said. “Bank foreclosed, abandoned for anywhere from six to 18 months. Roof was collapsing in ... fence is falling down. You can see where the insulation is – they haven’t gotten to that part yet. These are the type of houses that we buy, that ... people who are investing the real estate market don’t buy because they are in such disarray. Our goal is not to interfere with the private market.”
A neighbor on Cedar, Nancy Reid, said she was glad to hear the house would be fixed up and put on the market.
“It’s an eyesore,” Reid said. “It’s been that way for an awful long time now. I’d rather see people living there and keeping it up than having it look the way it does right now. Particularly somebody who has to work to get the house and take care of it.”
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The Foreclosure Redevelopment Program is one of three federally funded programs that support homeownership, said Scott Berger, director of the Kane County Office of Community Reinvestment. First Time Home Buyer Assistance helps with down payments, and Homeowner Rehab Assistance helps with loans to homeowners to rehab their homes.
Funding for these programs can vary each year, Berger said, but the average during the past four years is $615,000 that supports these three programs.
Projects like the one at 23 Cedar Drive have to be green and energy efficient, so they use high-end insulation and windows, Beck said. Another example will be replacing a broken front sidewalk with water permeable pavers.
The rehab will cost about $100,000, Beck said. Then it will be put on the market for the appraised value when it is completed.
Because the program is federally funded, there are income requirements for potential buyers, Beck said. The buyer pool is somewhat restricted that way, Beck said, but a family of four with an income of $58,000 at current interest rates, could qualify to buy a $170,000 house.
Potential buyers also are required to take an eight-hour homeownership course to support their ability to keep their houses, Beck said.
“I’ve seen data out there that programs like this have had a very, very low foreclosure rate, less than 3 percent,” Beck said. “We have to do 30-year fixed, no adjustable rate ... [because] if it adjusts too high, it can be unaffordable that quick, and he can be in a foreclosure.”
Although the county’s program has done 33 houses, it also partners with other agencies, such as Community Contacts Inc., based in Elgin, which is doing the rehabilitation at 23 Cedar Drive.
“We do weatherization, home rehabilitation, energy assistance,” said Lowell Tosch, executive director of Community Contacts, which serves Kane and DeKalb counties. “We do affordable rentals and foreclosures, rehab them and, in most cases, we sell them to an eligible homeowner. We partner with Kane County on that.”
Berger said the county began its foreclosure redevelopment program in 2010 in the midst of the housing crisis.
When a house is foreclosed and then abandoned, it affects the neighborhood in a negative ripple effect, Berger said, but the ripple is positive once the house is rehabbed.
“It’s not just about purchasing and rehabilitating the house, but the indirect benefit to the neighbors next door and down the block,” Berger said. “When they go to sell their property, that blighted property would have dragged their value down.”
When houses are sold, the county recoups most of the money, and it goes back into the fund for continuing housing support, Berger said.
Another neighbor to 23 Cedar Drive, Miguel Sanchez, 17, said he would like to have neighbors again.
“The neighborhood is pretty nice; we all keep our houses pretty clean,” Sanchez said. “This is a good thing.”