A new initiative in New York City which aims to convert vacant or distressed properties into homes for area families specifically cites homes with reverse mortgages as a part of its effort, aimed at expanding the inventory of homes in the lower New York region.
The new program, called the Vacant Important Properties (VIP) Initiative, is funded by RebuildNY.com and went into effect on January 1, 2021.
“Through VIP, owners of vacant homes are offered financial and other incentives to sell, in addition to the purchase price,” reads an announcement about the initiative’s availability. “For properties in distress, such as foreclosures, short sales, reverse mortgages or estate sales, the initiative offers pro-bono services and assistance grants to make it easy for owners to close, get paid and receive their VIP financial incentive payment.”
The initiative is designed to assist owners of vacant homes, local government and municipal jurisdictions, concerned neighbors and other community leaders to “eliminate the risks posed by homes that have been abandoned,” the announcement reads. The specific properties are purchased and subsequently renovated, which the initiative says can “revitaliz[e] communities and restor[e] value.”
For people who own a property that may have a reverse mortgage on it, an attorney associated with the initiative says that owners can still pursue a sale contrary to popular belief.
“[Homeowners] can benefit from selling a property that has a reverse mortgage recorded against it,” says Dustin Cohen, principal of the Law Office of Dustin J. Cohen, PLLC in Massapequa, N.Y. in a video Q&A recorded by RebuildNY.com. “They could do something that’s called an option contract, [which] gives a third party the right to purchase that property for a determined period of time. And once that option is exercised, that heir or next of kin that’s selling that property can benefit from a short sale transaction by receiving money pursuant to that option contract.”