MEMPHIS, Tenn. — We’re always telling you about a new development in Memphis coming to Downtown or Midtown, but now there are new opportunities for other parts of the city that deserve to see as much growth.
Memphis is one of three cities chosen to be part of the pilot “Appraisal Gap Program.”
“I think it’s an exciting opportunity for people to get new (housing),” explained Paul Young, Director of Housing and Community Development for the City of Memphis.
State officials say Memphis is recovering from the 2008 housing crisis at a slower pace than other parts of Tennessee.
Young says in some neighborhoods like Frayser, Hickory Hill, Whitehaven, and Raleigh housing stock is aging, but there are still great properties that could use investment. In some communities, however, it takes more to renovate a property than it would to purchase one.
An investor rehabbing a home could put $100,000 into it but end up falling short.
“But you can only sell it for $65,000 because there are no comps in the area that go up to $100,000,” Young explained.
So the Tennessee Housing Development Agency says they will come in and support nonprofits in developing the homes, paying the difference between appraisal and the cost of renovation, up to $20,000.
“It helps you because you will be able to purchase properties in these communities that will see improvement. Whereas you haven’t previously been able to do so,” said Young.
In Memphis, the state is partnering with nonprofits like The Frayser Development Corporation, Habitat for humanity and United Housing. THDA Executive Director Ralph Perrey said they hope this program can make a lasting impact.
“It is our hope that if this works as intended the need for the program itself goes away because we would have had a positive impact on some of those areas,” Perrey explained.
There’s half a million dollars the state is spreading among Chattanooga, Memphis and Oak Ridge. The money will be divided out on a first come first serve basis and the exact amount of each grant will be determined bases on a case-by-case basis.
The one-year pilot program that starts in December.