Market for Fixer-Uppers Traps Low-Income Buyers


Nationwide, more than three million people are estimated to have bought a home through a contract for deed. Now complaints are piling up in cities across the country.
News Story (NATIONAL)

Matthew Goldstein, Alexandra Stevenson
New York Times (NYT)
February 20, 2016
READ THE FULL STORY HERE

Tags: Housing, Housing: Contract for Deed

Organizations mentioned/involved: Texas RioGrande Legal Aid (TRLA)


DETAILS

Dozens of these houses were scooped up after the financial crisis by investors, who then make deals with low-income home buyers unable to get traditional mortgages. The arrangement is something like buying a home on an installment plan, with a high-interest, long-term loan called a contract for deed, or land contract.

But for buyers lured by the dream of homeownership, these seller-financed transactions can become a money trap that ends with a quick eviction by the seller, who can flip the home again. Before the housing crisis, low-income buyers got too much of a house that they couldn’t afford. Now, they are getting too little of a house that they can’t afford to repair.