West Village Renovations

[DetroiterOnTheWestCoast]

The bidder must have income following these guidelines2015 HUD Income Limit)
1-person $56,850
2-person $65,000
3-person $73,100
4-person $81,250
5-person $87,750
6-person $94,250

The listing price would seem to be at odds with the income requirements.

[mwilbert]

The listing price would seem to be at odds with the income requirements.

I don't see the problem. If you assume that the property taxes are at the full homeowner rate [[which might not be the case in that location) that would be $7000/yr. Assuming you could get a mortgage, which I realize is a potential problem at that price, at current rates that would be under $1000/mo if you were paying on the full $200,000. So you should end up a bit under $19,000/yr. That is about 29% of the two-person income limit. Seems doable if you can actually get the mortgage.

[LP_85]

I don't see the problem. If you assume that the property taxes are at the full homeowner rate [[which might not be the case in that location) that would be $7000/yr. Assuming you could get a mortgage, which I realize is a potential problem at that price, at current rates that would be under $1000/mo if you were paying on the full $200,000. So you should end up a bit under $19,000/yr. That is about 29% of the two-person income limit. Seems doable if you can actually get the mortgage.

Right. Those requirements would make it tough for a single person to afford the asking price, but a couple or a family of three would probably be able to manage it at those income levels. And it's a good size with 3 bedrooms. I bet Villages CDC and HUD would rather have a growing family in a house like that than just one person. It's also my understanding that, because of HUD regulations, it's not allowed to sell any higher than the listed price.

A commenter on the Curbed article for this house made a good point too:

The goal of the HUD neighborhood stabilization project is to fix up a house in a neighborhood that has declining values so the higher price sale will boost future home values in the neighborhood. For example, if the last 3 home sales in a neighborhood have sold for $80K and they are similar to the home you want to buy, you can reasonably expect the appraised value to come in around $80K. Now, say for example, the last 3 homes in the neighborhood sold for $80K, $80K and $200K. The $200K home has $75,000 in updates that the home you want to buy doesn't have. An appraiser would then compare the value of the home you want to buy against $80K, $80K and $125K [[$200K minus $75K). So if you average those three homes values, you can expect the appraised value of the home to be $95K. Say that happens and you pay $95K for your home. The next home that gets appraised will be compared to $80K, $125K [[HUD home) and the house you just paid $95K for. Appraised value will come in at $100K and sell for that price. So on and so forth, thus boosting the values of the homes in the area. That is the goal of this project.

One other thing: I was in West Village a couple weeks ago, and it looks like the two duplexes mentioned earlier are pretty much done with their renovations. Haven't seen any listing/rental information on those yet. There was also a house around the corner on St. Paul with crews in the middle of a ton of work - not sure if it's part of the same program. Also a lot of work going on with some business spaces on Kercheval.

[esighed]

The two duplexes 1536/40 Van Dyke and 1449/53 Van Dyke will be rentals and the Villages CDC will have more info soon with a specific time period to apply for the rental units. The web site is:
www.thevillagesofdetroit.com

The Kercheval businesses in the old bank/Domino's Pizza bldg will be 75 seat restaurant Geiger Eat Shop, 8044 Kercheval just down the street from Sister Pie. Chef Greg Reyner from Royal Oak's Cafe Muse expects to open this place next April 2016.
The other buildings just east on Kercheval will be a restaurant/museum called Gabriel Hall. Plans are for a New Orleans flavored restaurant by band leader Dameon Gabriel.
Good news for West Village!