Lawmakers in New Jersey recently passed legislation that will allow the state to buy vacant, previously foreclosed homes for renting or resale.
The New Jersey Residential Foreclosure Termination Act would create a new government body to acquire, sell and rent the properties, produce financial statements of its transactions and report annually on foreclosure activity in the state. It would also take control of any foreclosed properties bought by cities in the state if they sat idle for 180 days after purchase.
Cities would receive affordable housing credits based on the number of homes made available to low-income residents or rented out. A significant number of foreclosures are still pending in the state, although processing may move more quickly now than in recent years.
The passage of the law could lead be good for the stability of the residential real estate industry in the state. At the same time, private investors might find government involvement means they have fewer options when it comes to buying foreclosed homes.
If the agency targets low-income residents specifically, rental property management firms and owners dealing with other segments of the market might not be directly affected.