In an effort to help stem the decline in property values plaguing many neighborhoods and communities, the Ford Foundation has committed $50 million in program-related investment funds to a new nonprofit venture to help municipalities buy foreclosed homes from financial institutions, the Wall Street Journal reports.
The funding will go to the National Community Stabilization Trust, a consortium of community-based nonprofits that will serve as a middleman between cities trying to rehabilitate neighborhoods and mortgage servicers looking to unload seized properties. Unlike a typical grant, the investment is from Ford’s endowment principal and will take the form of a 10-year loan with a below-market interest rate of one percent.
Backed by Ford and the John D. and Catherine T. MacArthur Foundation, which is contributing $3 million to the effort, the stabilization trust will work with state and local governments and other groups that have received special grants from the U.S. Department of Housing and Urban Development to buy and redevelop foreclosed homes. The trust hopes to spur purchases in more than 100 cities by year’s end.
In addition to the stabilization venture, Ford plans to spend up to $100 million on housing over the next five years, doubling what it has allocated to that program area over the past decade.