Federal Funds Targeted to Help Foreclosure-Riddled Neighborhoods
San Diego approves funding formulas for program to aid first-time homebuyers, renters
BLOOMBERG NEWS
An auction sign is posted outside a foreclosed home in Stockton, California, U.S., on Thursday, Sept. 18, 2008. A tidal wave of anxiety is washing over America, from Wall Street's concrete canyons to the lettuce fields of California, propelled by the mortgage industry collapse, high gas prices, tight credit and rising unemployment. Photographer: Kimberly White/Bloomberg News
Stabilizing neighborhoods hit by foreclosures -- that's the goal of nearly $10 million in federal grants to be allocated to San Diego early next year.
City officials on Tuesday outlined funding formulas for the proceeds from Congress' Housing & Economic Recovery Act.
A short while later, the City Council gave its approved to the program.
"We can't afford to let neglected or abandoned properties interrupt the progress that we've worked so hard to make," City Councilwoman Toni Atkins told reporters at a City Hall news conference.
Most of the city's proceeds from the grant will help about 75 median-income, first-time home buyers swing the purchase of foreclosed houses.
Other funds will go to buying and fixing up some two dozen foreclosed homes for rental to low-income families.
Housing officials expect further federal assistance in the not-so-distance future.
"This is just the first step, and I think it's a very good first step," said Rick Gentry, president and chief executive officer of the San Diego Housing Commission.
"These are significant resources from the federal government."
The foreclosed homes and condos involved in the program will be acquired from lenders who agree to sale prices at least 5 percent below appraised value.
The program could be in operation by April.
