County Targets Foreclosed Houses

Programs to Help Public, Private Workers Buy Properties

By Christopher Twarowski

Sunday, October 5, 2008

Loudoun County officials are working out the details of a program to help public employees purchase foreclosed houses and have approved another measure aimed at encouraging public and private-sector workers to buy such properties.

The first program, expected to be sent to a Board of Supervisors committee next month, would provide $5,000 grants to county and school system employees toward the purchase of a foreclosed property in Loudoun. The second, which the board approved last month, would allow people making up to $99,000 a year to receive low-interest loans when buying a foreclosed house.

Foreclosures have been rising across Loudoun, bringing with them zoning and law enforcement challenges. At the same time, there has been a shortage of affordable housing for the county's workforce, resulting in many public employees — including about half of Loudoun sheriff's deputies — living outside the county.

To address both issues, board Chairman Scott K. York (I-At Large) proposed in June that the county provide financial incentives for public workers to buy foreclosed homes in hard-hit areas such as Sterling Park.

"It's like taking a magnifying glass," York said. "You concentrate the sun's rays at where you can start a fire. In this case, what I was trying to do is concentrate at one area where we could bring in and solve a challenge in what is really a challenged area right now."

After discussions with other supervisors and two county advisory panels on housing, York's idea evolved into a broader effort to offer such assistance to public and private workers and to include all areas of Loudoun.

County staff members are drafting the ordinance that would apply only to public workers, called the "Public Employee Live Near Your Work" program. The current version of the proposal would provide up to 30 housing grants of $5,000 each to public employees who make $29,700 to $69,300 a year. State code allows for grants of up to $25,000 per employee but does not provide the funding. The county would tap an existing housing fund that has $5.5 million.

The measure that applies to public and private workers is an expansion of the Eastern Loudoun Revitalization Program, which has provided low-rate rehabilitation loans to owners of houses at least 30 years old. With the board's action last month, the program is now offering similar loans to buyers of foreclosed houses. About $200,000 in loans is available.

According to the latest figures from the county assessor's office, there have been 1,443 foreclosures through the first eight months of 2008 in Loudoun, compared to 585 during the same period last year. The total for all of 2007 was 1,258.

There are many more foreclosures still to come, county officials said. The payments of people who have adjustable-rate mortgages, or ARMs, are expected to skyrocket soon.

"What you're going to see, probably beginning this year and moving forward for probably the next two years, is an increase on foreclosures on these one-year ARMs and these three-year ARMs," County Assessor Todd Kaufman said. He said ARMs were usually taken on higher-end houses.

The area of the county with the most foreclosures so far this year is Sterling, with 320, followed by Dulles with 248 and Leesburg with 194.

The neighborhoods hardest hit by foreclosures also have zoning problems that breed crime, Sheriff Steven O. Simpson said.

"You have a lot of people living in a house, cars parked all over the yard, trash, tall grass, things like that," Simpson said. "As the neighborhood deteriorates, that kind of stuff leads to crime."

Simpson said he welcomes any housing initiative that would lead to more sheriff's deputies living in Loudoun. He noted that it takes longer for officers who live outside the county to respond to emergencies in which additional officers are needed. Some deputies live as far as Pennsylvania, and such distances restrict them from being in certain response units, he said.

Simpson said the problem robs Loudoun communities of deputies' involvement in social activities such as coaching youth sports. It also affects recruitment, he said.

"Trying to recruit people to come to work here when they can't afford to live here is difficult," Simpson said.

York also spoke of the benefits of bringing "community-oriented people" to areas of need. He said the housing initiatives would help county workers reduce their commute and save on gas costs.

Tagged: home sales, housing market, real estate

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