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The Fair Housing Center of West Michigan is preparing to deploy $1.2 million to nonprofits in Grand Rapids and Muskegon with funding from a recent settlement with Fannie Mae. The Fair Housing Center of West Michigan is preparing to deploy $1.2 million to nonprofits in Grand Rapids and Muskegon with funding from a recent settlement with Fannie Mae.

$1.2M in Fannie Mae settlement funds set for GR, Muskegon housing

BY Sunday, April 10, 2022 06:02pm

The Fair Housing Center of West Michigan is one of 20 housing organizations across the country preparing to distribute funds from a landmark $53 million settlement that the National Fair Housing Alliance reached with Fannie Mae.

The Feb. 7 settlement resolved claims that Fannie Mae failed to maintain homes it owned in majority-Black and Latino communities compared to foreclosed homes Fannie Mae owned in predominantly white neighborhoods. The Fair Housing Center of West Michigan (FHCWM) will receive $600,000 from the settlement to invest in nonprofits in Grand Rapids and $600,000 to invest in Muskegon, said FHCWM Director of Advocacy Elizabeth Stoddard. 

“The purpose of the funds is to try to counteract some of the issues that occurred due to the lack of maintenance and marketing,” Stoddard said. “The funds will be geared toward neighborhood stabilization and rehabilitating properties.”

Fannie Mae conducted about 80 assessments on properties in Grand Rapids and Muskegon that were involved in the case. In Grand Rapids, the 49507 ZIP code — where most of the assessments took place — on the southeast side will receive most of the funds, Stoddard said.

The Fannie Mae case was the first time a federal court confirmed that fair housing laws cover the maintenance and marketing of real estate owned (REO) properties that are owned by lenders after failing to sell at a foreclosure auction. The case involved 2016 allegations and a four-year investigation of more than 2,300 Fannie Mae-owned foreclosed properties across the country. 

The investigation of Fannie Mae-owned properties was based on a set of criteria that included identifying a for-sale or auction sign, the condition of the home, maintenance of the yard and collection of mail at the house, Stoddard said. More than 49,000 photos were taken of properties to compare homes in predominantly Black and Latino communities to predominantly white communities. 

“The impact of failing to maintain a property can impact property values, add community blight and can even impact the opportunity for crime when there are vacant or abandoned properties,” Stoddard said. “Those are things that are difficult to measure, but there are lasting effects of failing to maintain properties.”

Stoddard said nonprofits or organizations to receive the funds have not yet been identified, but a key first step involves reaching out to learn about affected communities’ needs. 

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