Tuesday, Sept. 30, 2008 | 2 a.m.
- Taxpayers deserve right deal right now (9-28-2008)
- Feds send $72 million to region to fight foreclosure (9-26-2008)
- Price dips have bright side (9-25-2008)
- Nevada holds on to nation's highest foreclosure rate (9-12-2008)
Nevada housing officials are plotting this week how to spend $72 million in federal funding to resuscitate neighborhoods blighted by foreclosures.
The money might seem but a morsel of help in comparison with the $700 billion bailout package to rescue the financial industry that was rejected by the House of Representatives, but officials say it will help communities stigmatized by vacated homes, dead lawns and murky swimming pools.
The money, from the federal Housing and Urban Development Department, is intended for municipalities to buy and rehabilitate foreclosed homes that can then be sold to low- or moderate-income residents.
The aid is welcomed in Nevada, which leads the nation in the rate of home foreclosures.
“It’s not a program to help individual homeowners, but to help communities facing widespread vacant foreclosed properties,” HUD spokesman Larry Bush said.
Clark County and the cities within it will share $47.6 million, with the balance of the state carving up another $24.3 million. The money flows from the $4 billion Housing and Economic Recovery Act of 2008, passed by Congress two months ago.
In the past four years, two out of five homes in the Las Vegas Valley were purchased with the kind of risky subprime loans that have triggered the housing and credit crises. HUD Las Vegas field director Ken LoBene said that if a city or county were to buy a few homes in a community full of foreclosures, that neighborhood may be viewed more favorably to potential home buyers. So the federal funds could have a dual role: helping low-income residents buy homes and restoring even new neighborhoods that are reeling from empty homes and unkept yards.
“Where’s the tipping point in each neighborhood?” LoBene said.
Other allocation options for the county, as well as for Las Vegas, North Las Vegas and Henderson, include offering down payment and closing cost assistance to low- and moderate-income home buyers, or residents whose household incomes don’t exceed 120 percent of an area’s median income. At least 25 percent of the money must be used for residents whose income does not exceed 50 percent of a region’s median — and not necessarily for former homeowners whose properties were foreclosed.
The state Housing Division has a different question of allocation before its staff: how to divvy up $24.3 million between cities and counties that didn’t get direct funding, including Washoe County and Carson City, and those that did. Charles Horsey, the division’s administrator, said his staff was ironing out its recommendations Monday and hoped to present them to the governor’s office this afternoon. It’s possible funding could be earmarked before the legislative session starts next year, he said.
“We’re painfully aware that the money isn’t enough to cure all of the ills ... out there,” Horsey said.
Although Northern Nevada cities and counties did not qualify for immediate funding from HUD, they figure to lobby Horsey or the governor’s office for cash.
“We’re not very happy about this,” Reno Mayor Bob Cashell said. “I hope they do not send the other $24 million south.”
Clark County will receive at least $22.8 million, Las Vegas at least $14.8 million, North Las Vegas at least $6.8 million and Henderson $3.2 million. The recipients must present an action plan for the money by Dec. 1, and spend it within the next year and a half.
Representatives of local governments said they were expecting to receive regulations on how to spend the money late Monday and would begin brainstorming how to use it.
Sun reporter Cy Ryan contributed to this report.