Seminole Co. plans to buy foreclosed homes, fix and resell

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SEMINOLE COUNTY, Fla. —

Seminole County leaders are hoping a new plan will help neighborhoods hit hard by the foreclosure crisis.

WFTV found out the county will spend millions of dollars to buy dozens of foreclosed homes. The homes will then be fixed up and resold.

The county is buying 40 foreclosed homes, fixing up, and reselling to stabilize property values in three target neighborhoods: Alafia Woods in Oviedo, Sterling Meadows near Sanford, and Deer Run in Casselberry.

The Department of Housing and Urban Development (HUD) identified them as hardest hit by the foreclosure crisis. Home values went from $300,000 in some cases, to $100,000.

"Prices just went up, way up high, and of course the banks were lending money that they shouldn't have, you saw the results of that," said Alafaya Woods resident Gloria Economou.

But Economou worries about who will move in. The county is using $4 million in HUD funds for the homes, and most associate HUD with public housing, which is not exactly how residents describe the middle- to upper-class neighborhoods the county is targeting.

Still county officials said families will have to qualify for their own loans.

Anyone who moves into the homes will stay put. Families will have to claim the home as their homestead property on their taxes for the next 20 years. That way, they won't be able to rent it out. If they sell the home, they would have to pay back every penny the county used to buy and rehab the home.

That new program comes as new information shows the number of foreclosures is falling in metropolitan Orlando.

According to the Orlando Business Journal, about 11 percent of all homes on the market last month were foreclosures.

That was down 1.5 percent from last year. Statewide about 11 percent of all homes for sale are foreclosures. Nationwide, the rate is around 3 percent.

Those numbers, however, could be misleading. In Orange County alone a Realtor database currently shows 600 foreclosures for sale. But the county property appraiser lists three times as many foreclosed homes as ready to go on the market.

Those homes are not on the market because banks are holding onto foreclosed properties to keep prices from falling.