Ford Foundation Aids In Solving Mortgage Crisis
STEVE INSKEEP, host
One of the nation's biggest philanthropies is stepping up to see if it can do something about the housing crisis. The Ford Foundation says it's going to put $50 million into a new program intended to get houses out of the hands of banks and into the hands of homeowners.
NPR's Wendy Kaufman has more.
WENDY KAUFMAN: There are two things about the Ford Foundation's effort that fascinates Nicholas Retsinas. The director of Harvard's Joint Center for Housing Studies says the first is the scale. This is a major investment.
Professor NICHOLAS RETSINAS (Director, Harvard University Joint Center for Housing Studies): Secondly, the willingness of the Ford Foundation to take on a problem where it's not clear that the problem can be fixed in the near term. But it's as if they're saying we have to intervene, that we can't stand on the sidelines. We can't do this house by house. We can't do this community by community.
KAUFMAN: It's a national problem, says Retsinas. The number of homes in foreclosure is high and going higher. So the Ford Foundation is making a large, low-interest loan to the National Community Stabilization Trust. The money will be used to acquire and renovate houses, which will ultimately be sold to moderate and low-income buyers. The mechanism is complex, but the Ford Foundation's Frank DeGiovanni believes it's an efficient way to turn abandoned houses back into viable neighborhoods.
Mr. FRANK DEGIOVANNI (Director of Economic Development, Asset Building and Community Development Program): This is a really great example of how foundations can provide risk capital to get a variety of players to come to the table and advance new solutions. Foundations are really good at taking risks that other players often cannot take.
KAUFMAN: Nothing on this scale has ever been tried before. Add that to the overall weakness in the U.S. economy, and it's impossible to predict whether the Foundation's big bet will pay off.
Wendy Kaufman, NPR News.