County Housing Relief Slim

Federal Funds Will Support Rehab Of '2.5 Homes' Claimed By Foreclosure

April 19, 2009|By Larry Carson | Larry Carson,

After requesting $4.4 million, Howard County is to get $750,000 in federal foreclosure relief funds from the state to buy, fix and resell bank-owned vacant homes.

That would be enough for "2.5 homes," the county's housing director, Stacy L. Spann, said recently, though he added that Howard might get a second crack at more money if some funds are left unspent.

The other frustration is that the money can't be used to prevent foreclosures, only to recycle homes already owned by banks, Spann said.

"It's not proactive, and there's no flexibility," Spann told county Housing Commission and Housing and Community Development board members recently. "It's a real challenge when you can't prevent foreclosures."

The money, a sliver of the $3.92 billion in federal funding approved in 2008 as part of the Housing and Economic Recovery Act, comes from the $26.7 million Maryland received. Of that, $18.9 million is going for "neighborhood stabilization" in 17 jurisdictions.

Other jurisdictions with much larger foreclosure problems got more money directly from the federal government. Prince George's County, for example, got $10.9 million, and Baltimore County received $2.6 million.

Spann acknowledged that Howard's foreclosure problem pales compared with some other jurisdictions. Prince George's, for example, has the highest rate in Maryland, accounting for 36 percent of all foreclosures in the fourth quarter of 2008, compared with Howard's 2.3 percent, state figures show.

"Prince George's County is an entirely different situation," Spann said.

The funding will allow Howard to recycle two or three homes at below-market prices to families with limited incomes, Spann said. The homes are in two ZIP codes that have the county's highest number of foreclosures. The areas - 20723 in North Laurel and 21045 in East Columbia - have a combined 19 foreclosed, bank-owned homes, Spann said.

The funding can also be used to reduce closing and settlement costs on the houses that are rehabbed, Spann said, though he added that it's uncertain when the money will arrive.

The county was scheduled to hold a housing fair on Saturday at Long Reach High School from 10 a.m. to 2 p.m. to offer information to limited-income residents interested in buying below-market-price homes through the county's Moderate Income Housing Unit program.

But while the federal government is helping with home foreclosures, the county continues to be squeezed on funding for rental subsidy vouchers, Spann said. As rents rise, the federal funding has not increased, and with the recession making rent subsidy vouchers all the more valued, it's rare for a family to give one up, Spann said. Under the program, families with incomes under 50 percent of the area median can get a rent subsidy intended to allow them to spend no more than one-third of their income on shelter. Three-quarters of the money is to go to the lowest-income families below 30 percent of area median income, or about $24,000 for a family of four.

"People are hanging on to the vouchers," Spann said.

The result is that the county has 730 families using vouchers to pay their rent, but federal money is enough for just 676, a difference of 54. To make up the roughly $52,000 a month not covered, the county has been using money it receives for administrative costs to avoid forcing families out of subsidized units.

The county has nearly 3,000 people on a waiting list for rent vouchers, which average about $950 a month, with little hope of getting one.

foreclosure assistance

How jurisdictions in the region fared in receiving funding from the federal Neighborhood Stabilization Program, which is administered through the state:

* Anne Arundel: $1.2 million.

* Baltimore City: $1.6 million, plus $4.1 million in direct federal aid.

* Baltimore County: $1.5 million, plus $2.6 million in direct aid.

* Harford County: $1.75 million.

* Carroll County: Did not submit an application.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.