County Given Federal Funds to Purchase, Renovate Foreclosures

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Monday, April 6, 2009

Loudoun County will receive $2 million in federal money to provide loans and purchase and renovate foreclosed houses in areas hit hard by the financial crisis.

Virginia Gov. Timothy M. Kaine (D) announced today that Loudoun would get the state-channeled funds, which the county can use to purchase or offer housing loans for about 30 properties through the Neighborhood Stabilization Program.

County officials agreed to match that amount with $1.6 million.

The $4 billion federal foreclosure program, which is run by the U.S. Department of Housing and Urban Development and administered in Virginia by the state's Department of Housing and Community Development, was created last July by the Housing and Economic Recovery Act of 2008.

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Virginia has received $38.7 million through the program and the Loudoun grant is one of a few to be handed out so far. Caroline, Spotsylvania and Stafford counties and the city of Fredericksburg will split another $5 million, in partnership with the Central Virginia Housing Coalition.

Prince William and Fairfax counties have already received money from the program — $4.1 and $2.8 million, respectively. Other Northern Virginia jurisdictions are eligible to apply for money from the state pot.

Loudoun County's foreclosure rate jumped to 2.3 percent last year. Areas of eastern Loudoun County, including townhouses and single-family houses in Sterling Park and Sugarland Run, have been the most affected, county officials say, with foreclosure rates in those neighborhoods rising well above 2 percent and the statewide average of 1.73 percent.

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Comments:

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Geez--3.6 mil ain't gonna go very far.

Posted by kpschroe (anonymous) on April 6, 2009 at 6:23 p.m. (Suggest removal)

What a dumb idea. It would be better to use the money to bulldoze many more houses then could ever be refurbished for 3.6 million and replace them with a green lawn which the county would pay someone $35 a week to cut.

The last thing needed is more housing inventory. Government intervention is preventing the market from finding the true bottom, only prolonging the crisis.

Years from now when the market has rebounded (to sane levels, not to 2003 - 2005 levels) a wise builder can buy the lots from the county and build a home once demand and supply make sense again.

In the meantime the blight is cleared, inventory is reduced and vacant lot is covered by a maintained lawn.

Posted by dbc007 (anonymous) on April 6, 2009 at 9:06 p.m. (Suggest removal)

Wow wonder where this money will really go? Kinda like the school budget.

Posted by Funnyguyva (anonymous) on April 7, 2009 at 10:25 a.m. (Suggest removal)

dbc, while I'm sure it's an attractive idea to some to simply bulldoze houses, bulldozing some of the last affordable ones in Loudoun may not be the magic bullet.

With expansion of land use controls, the ongoing rise in proffers, and increase in regulation, there is almost no such thing as a modest affordable single family home anymore.

I'm not too thrilled with what's happening with all the wet-ink money flying around, but reducing inventory through destruction doesn't sound too good either.

Posted by BarbaraMunsey (anonymous) on April 7, 2009 at 11:42 a.m. (Suggest removal)

Barbara, What's "affordable" is ultimately determined by the market. Propping up the market with too much government intervention has prolonged Loudoun's (and the country's) problems. Fixing up a home only extends the problems because it will leave too much supply in the market thus not allowing a true bottom thus keeping willing buyers on the sidelines. Good buyers (a job, income, ability to pay) are waiting because every week there is a new announcement about some new program so their mind set is to sit it out and wait for even lower prices. Pretty soon everything in Loudoun will be "affordable" but there won't be enough buyers with good credit to buy (and who will want to live here when the BOS will actually have to make real cuts in the budget because the tax base has up and gone?).

Posted by dbc007 (anonymous) on April 7, 2009 at 12:18 p.m. (Suggest removal)

dbc007,
My husband and I have credit scores near 800 and STILL cannot get a loan! We both have jobs and are able to pay. It is not buyers who are the problem- it is the banks who are too scared to lend even to those of us who you would think WOULD qualify!

Posted by llm (anonymous) on April 8, 2009 at 8:21 a.m. (Suggest removal)

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