New Program Aids Homeowners Facing Back Taxes

A new public-private partnership offers a pathway for low-income homeowners to stay in their homes.

The City of Milwaukee takes ownership of houses via property tax foreclosure after taxes go unpaid for multiple years. In many cases, the occupants can stay in the home but as renters, not homeowners.

Each year, dozens of city residents appear before the Common Council to buy their property back, needing to pay any unpaid taxes, interest, water service charges, municipal service fees and any other outstanding fees. The City Treasurer’s Office advises the individuals of a specific amount, down to the penny, that must be presented by the time of the council meeting.

The amount can be daunting for the often low-income individuals. But a new program from ACTS Housing and the Legal Aid Society of Milwaukee provides a loan for the balance, as well as additional funding to make code compliance-related repairs to the house.

The city approved its first sale through the program in November. It sold a S. 6th St. home acquired in property tax foreclosure in 2019 back to the original owner for $16,138.67.

Property records indicate the individual had lived in the home since at least 2009. Now he owns it again.

“He’s buying back the property with the help of Legal Aid and ACTS,” said Department of City Development real estate services manager Amy Turim in presenting the new program to the Zoning, Neighborhoods & Development Committee on Nov. 16. “Legal Aid and ACTS offer a program for tax-delinquent occupants.”

The two nonprofits have often worked in tandem to support various housing efforts. The new program provides the upfront capital to reacquire the property or avoid foreclosure altogether, while also providing funding to make repairs.

“The program also escrows for taxes to prevent further delinquencies,” said Turim.

Intake work for the program, done in English or Spanish, is done by Legal Aid. Individuals are encouraged to call the organization at 414-727-5300.

Turim said both Legal Aid and ACTS will work to qualify if an individual and property are eligible.

“We hope to be able to partner again for this program and to help people stay in their homes,” said Turim.

Buying the home back as a new transaction also has a benefit over the traditional route in creating a clean title free of any liens or judgements. The traditional route, known as an in-rem redemption, involves the city vacating its foreclosure judgment and, in turn, restoring any other liens against the property.

“This is clearly a better way to do this,” said Ald. Robert Bauman. Ald. Jose G. Perez agreed.