DUDLEY NEIGHBORS, INC HELPS ROXBURY RESIDENTS KEEP THEIR HOMES

As foreclosures pile up in the Bay State a Roxbury neighborhood with predominantly low-income residents has remained free of mortgage defaults.

The success is the result of a land trust run by the preservation group, Dudley Street Neighborhood Initiative, that owns the land and sets rules that limit the profit owners can make by reselling their homes.

John Barros, executive director of the Dudley Street Neighborhood Initiative said the trust was part of a plan conceived in the 1980s, when residents and members of the initiative were grappling with how to revitalize a neighborhood scarred by illegal dumping, neglect, and arson, while keeping it in the hands of people who grew up there. The trust purchased the land from the city with the help of a grant from the Ford Foundation.

The trust, Dudley Neighbors Inc., offers houses at substantially below-market prices because the sale does not include the land, which is retained by the trust. Applicants submit their names into the city's lottery process for low-income housing. The city conducts the screening because it provides the initiative with grants to help offset the cost of building the homes and maintaining the neighborhood. The state also provides grants. Almost all of the mortgages have 30-year fixed rates through locally based lending institutions, Barros said. There are no adjustable-rate mortgages, the type that have forced many families into foreclosure with interest rates that spike several percentage points, typically after two or three years.

The homeowners pay a nominal lease fee for the land. The trust prohibits homeowners from selling above 1 percent of the purchase price for 10 years. After a decade, the ceiling rises to 5 percent. Barros said the trust, which also built and maintains playgrounds and a community center, is probably the only of its kind in Greater Boston. The neighborhood now has more than 250 occupied single-family residences, and the number is expected to double soon.

Barros also said the land trust is currently seeking private funds to enable it to buy foreclosed homes in the area.
In Massachusetts, mortgage companies foreclosed on 7,563 homes last year, almost nine times the number in 2005, when the housing boom peaked, and almost three times the number in 2006. Last year's figure represents the most foreclosures in a year since the early 1990s.

-Adapted from: “Shelter from foreclosures: Group helps Roxbury residents keep their homes” By Brian R. Ballou, The Boston Globe, January 21, 2008, retrieved at: http://www.boston.com/news/local/articles/2008/01/21/shelter_from_foreclosures/

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