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HUD Foreclosure Clean Up Assistance: $4 Billion to Cities and Counties

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By Admin on January 05, 2009 2:22 PM

Cities and counties across the country are set to spend funds from the Department of Housing and Urban Development to help clean up abandoned homes. The $4 billion allocated by Congress would go toward refurbishing and selling homes that have already been foreclosed.

As reported by the LA Times, the "Neighborhood Stabilization Program" will help cities fight the viral effect of dropping property values which sink further due to disrepair and blight associated with foreclosed and abandoned homes. HUD spokesman Brian Sullivan stated that this will give cities "at least the opportunity to stanch the bleeding."

Though many still await boosted federal assistance to help those facing looking foreclosure, these $4 billion will go toward refurbishing, re-selling, or demolishing if necessary, already foreclosed homes. The funds must go towards homes in low- or middle-income neighborhoods. The homes cannot be resold to people earning more that 120% of the area’s median income.

City and county governments had until December 1 to submit their applications. The funds must be spent in the next eighteen months. Many, with foreclosure problems far exceeding the funds they will receive, have long been analyzing the best ways to spend the money.

Of all states, Florida will receive the most money, $541 million. 8% of all home loans in Florida within the past 18 months are currently in foreclosure, according to HUD statistics.