Stochastic Models for Strategic Resource Allocation in Nonprofit Foreclosed Housing Acquisitions Armagan Bayram Isenberg School of Management, University of Massachusetts, Amherst, MA, abayram@som.umass.edu Senay Solak Isenberg School of Management, University of Massachusetts, Amherst, MA, solak@isenberg.umass.edu Michael Johnson McCormack Graduate School of Policy and Global Studies, University of Massachusetts, Boston, MA michael.johnson@umb.edu Increased rates of mortgage foreclosures in the U.S. have had devastating social and economic impacts over the past several years. As part of the response to this problem, non-profit organizations such as community development corporations (CDCs) have been trying to mitigate the negative impacts of mortgage foreclosures by acquiring and redeveloping foreclosed properties. We consider the strategic resource allocation decisions for these organizations, and develop different stochastic integer programming models to help in their decision making. We apply the models to real-world data obtained through interactions with a CDC, and perform both policy-related and computational analyses. To this end, we present some general policy insights involv- ing trade-offs between different objectives, and also discuss the efficiency of exact and heuristic solution approaches for the models. Key words : OR in societal problem analysis, OR in strategic planning, foreclosures, stochastic programming, resource allocation 1. Introduction A dramatic increase in mortgage foreclosures has had adverse effects in all sectors of the economy but especially in the housing sector in the United States. Home foreclosures have resulted in massive losses of consumer wealth. U.S. households lost around $1.1 trillion per year on average in home value over the last four years (Zillow 2010, Daily Finance 2011), and the fraction of mortgages that are more than 90 days delinquent has been over 8% (Norman 2010). The foreclosure crisis in Europe has not had as severe of an impact. The European mortgage market saw a 1.2% decline in 2008 due to the same economic crisis (European Mortgage Federation 2010), and rates of severe mortgage delinquency are generally a third or less of U.S. rates (European Commission 2011). Several efforts by governments, companies and social organizations have been in place to reduce the losses realized due to the foreclosure problem. In the United States, such social organizations involve non-governmental/nonprofit entities referred to as community development corporations (CDCs). Among other community development projects, these organizations try to mitigate the 1