$153 Million Aid for Georgia’s Foreclosed Properties
The U.S. Department of Housing and Urban Development’s (HUD) Neighborhood Stabilization Program (NSP) will provide Georgia with $153 million funds to purchase foreclosed homes, repair and then sell or rent them. The amount is part of the U.S. government’s $700 billion financial bailout for the banking industry.
By buying and repairing these foreclosed homes, the U.S. government hopes to address declining real property values, create affordable housing and restore neighborhoods affected by the market crisis.
Under the HUD Homes guidelines, the housing aid covers only properties that have been foreclosed by banks. The program sets a limit to local governments to pay not over 85 percent of the property’s appraisal value.
People who are eligible to buy homes under the program are those who earn less than the 120 percent median income in areas where said properties are located. A four-member family with 85,000 annual income is eligible for the housing program.
Also, some properties covered by the program must be offered to families with an annual income of $35,000.
Local governments have the authority to choose properties that they would buy and repairs that would be undertaken, including hiring contractors. They are also allowed to rent out properties to eligible applicants and to evict those who failed to pay their rents.
However, local governments are prohibited from using the program to earn profits from the houses that they would repair and sell.
The funds are expected to be released by mid-February 2009. The HUD has given local governments, which have 45 days to develop their programs, until December 1, 2008 to apply for the housing aid program.
Local governments will be given 18 months to choose foreclosed properties that they would spend their allocated funds for four years. The remaining amount that has not been reserved or spent within the four-year period will be returned to the HUD.
