The Obama administration is proposing to use $15 billion of government money for “land bank” opportunities to help communities with large concentrations of distressed commercial and residential properties.
“Land banks that work with communities to buy, hold and redevelop distressed properties as part of a long-term redevelopment strategy have shown impressive results in stemming property price declines and stabilizing communities,” according to a summary of the President's $450 billion jobs program, which includes the land bank concept.
If Congress approves the funding, the $15 billion would be used to help capitalize land banks and encourage private sector investment.
The White House – which has dubbed the initiative 'Project Rebuild' -- also wants for-profit developers to participate in the rebuilding efforts.
“Many successful redevelopment strategies involve unique collaborations between local government, non-profit organizations and developers and other private actors,” the summary notes.
A separate Project Rebuild initiative involves bulk sales of Fannie Mae, Freddie Mac and Federal Housing Administration REO to private investors.
The Treasury Department is now soliciting proposals from investors that are interested in buying pools of REO. Congressional funding is not needed for the REO sales initiatives.
