Temporary Setback for Foreclosed House Buying Program
Florida’s budget cuts have affected Alachua County’s foreclosed house buying program. According to Alachua County housing manager Tom Webster, the total allocation received by the county from the State Housing Initiatives Partnership Program (SHIP) for 2009-2010 will be reduced to $378,849. Previous fiscal year saw the county receiving $2.5 million under SHIP.
The drastic reduction in the SHIP funding is attributed to revenue shortfalls. The budget cut means a reduction in the number of low-income and middle-income county residents who may receive financial assistance for new home down payment or foreclosed house repairs.
Webster said that the budget cut will have a major impact on the home buying program. He said that previously, the program served as many as 80 homeowners annually. Now, they are expected to serve only about 20 homeowners.
According to industry experts, a drastic decline in Florida’s tax revenue due to the economic downturn has led to budget cuts in both state and local programs. Webster explained that the SHIP funds are usually used as leverage for the state to obtain other federal grants. This means that the overall impact would be greater than the loss of SHIP funding.
Alachua County and Gainesville operate their own SHIP program which aims to buy foreclosed house. For the current budget year, both counties received an equal share of the total SHIP money amounting to $2.5 million.
Meanwhile, out of the $1.2 million allocated to the Alachua County, nearly $800,000 was used to fund down payment and renovation costs for first-time homebuyers. Home repair assistance program received around $250,000. The funds will also be used for special-needs and foreclosure intervention programs.
On the other hand, Gainesville city received about $1.3 million for the fiscal year 2008-2009. About 10 percent were allotted to down payment assistance. And remaining funds from last year will be redirected to fund other programs, including foreclosure intervention and home repair assistance.
County residents who want to qualify for the assistance program must meet certain income requirements.
Florida Senator Steve Oelrich said that drastic cuts have to be taken from various programs to balance the state budget. But industry experts are confident that state legislators would increase the SHIP funding as soon as the money comes in.
Webster said that for the fiscal year 2009-2010, the SHIP will be revised to use funds for deposit assistance only in partnership with a federal tax credit for buying a foreclosed house.
