City of Rochester and HUD Sign Historic Acquisition Agreement

Rochester is the first city in the nation to reach an agreement with HUD to purchase, manage, and sell vacant HUD-owned residential properties. In August, Rochester Mayor William A. Johnson, Jr. and Bill de Blasio, Housing and Urban Development Secretary Andrew Cuomo’s Representative for New York and New Jersey, signed a Memorandum of Understanding which will give Rochester full care, custody, and control of HUD homes within the city’s limits. The agreement is based on Rochester’s successful experience in marketing and selling HUD-owned properties.

In March, HUD awarded contracts to seven private companies to manage and market its national inventory of 40,000 foreclosed homes. The firm responsible for New York State was slow to list available properties. This was particularly frustrating in Rochester because it stalled the city’s successful HUD Owner Occupant Program (HOOP).

Through HOOP, the city worked with real estate agents to sell single-family HUD-owned homes at a significant discount. The city sold the homes to buyers who agreed to live in them for at least three years. There were no income limits for prospective buyers, nor were buyers required to be first-time homebuyers. The city paid a 7 percent commission to selling realtors and advertised the properties weekly. In the eighteen months of HOOP’s existence, the City of Rochester sold over 130 single-family homes to owner-occupants. HOOP received a national Best Practices Award from HUD.

The new acquisition agreement with HUD allows Rochester to acquire, manage, market and sell HUD-owned properties. Acquisition of HUD properties by the city will be phased-in over a period of several months. The ability to manage HUD properties will give city officials the control and flexibility necessary to sell more homes to owner-occupants. “This innovative partnership with the federal government will be of great benefit to the City of Rochester,” said Mayor William A. Johnson, Jr. “Our neighborhoods will be revitalized as we decrease the number of vacant homes. The private sector will benefit through the increased involvement of the real estate community. And we will be one step closer to achieving our housing policy of providing affordable, quality homes to city residents.”

The Rochester/HUD agreement has national implications. “The Memorandum of Understanding with the City of Rochester for this innovative pilot effort will serve as a model for municipalities around the country,” said HUD’s Bill de Blasio. The pilot effort may eventually include 10 to 20 municipalities, according to HUD.

For more information, contact Tom Argust, Commissioner of Community Development, City of Rochester, 716-428-6550.