News and Updates

Creative Impact Investing Helps Troubled Homeowners

It's been a decade since the real-estate bubble burst, but New Jersey still has a foreclosure problem. Last year, one out of every 62 homes in the state received a filing of foreclosure, compared with one of every 197 nationwide.

"There are lots of places where the market is clearly turning the corner," says Wayne Meyer, president of New Jersey Community Capital, or NJCC. "Unfortunately, it's still a big issue here."

Mr. Meyer's group is fighting back. Its weapon of choice: impact investing. Since 2012, the New Brunswick nonprofit has bought pools of troubled mortgages--2,452 loans in all--with the goal of modifying homeowners' loans to help them avoid foreclosure. When the properties the group buys are vacant, it sells them at a discount to charities that redevelop them as affordabele housing. 

NJCC's initial response to the crisis was to offer loans that help housing organizations buy and redevelop foreclosed homes, but the group quickly realized that wouldn't be enough, says Mr. Meyer.

"We were at the back end of the problem," he says. "Houses were already vacant. They were abandoned. They were draining the life out of neighborhoods, so we needed to figure out a way to get ahead of the problem."

So far, the community finance organization has helped 649 families stay in their homes and has sold 115 properties for redevelopment as affordable housing.

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