Federal Government Takes Measures To Stop Florida Foreclosures

by Simon Lindsay on Foreclosure Help, Stop Foreclosures

The U.S. Department of Housing and Urban Development recently allotted $91 million dollars to address the Florida foreclosures. The amount is expected to help the entire state, according to Gov. Charlie Crist.

The appropriation of the fund is through the Housing and Economic Recovery Act of 2008. In order to prevent blight in the local neighbourhoods, an amount of $3.9 billion is to be utilized to give emergency aid to state and local authorities to buy back foreclosure homes.

A sum of $98.8 million is expected to be allotted to the Tampa Bay area. The counties of Pasco and Hillsborough will be allotted a combined sum of $38.6 million. An amount of $13.6 million will be given to Tampa, making the total share of Hillsborough $32.8 million. Pinellas is expected to receive $17.6 million with $9.5 million going to St. Petersburg.

Other counties in the Bay area that are expected to receive grants are Polk County with $16.6 million, Sarasota County with $7.1 million and Manatee County with $5.3 million.

Target areas for grants were determined based on incidence of foreclosure in the areas. Percentage of subprime mortgages was also part of the criteria, along with defaults on mortgages and delinquent payments.

The distribution of funds is in line with the Neighborhood Stabilization Program which is covered by a bigger program of the agency, the Community Development Block Grant Program.

A big part of the funds will be spent on buying foreclosure homes, rehabilitating vacated properties, and providing aid on down payments and closing fees to needy homeowners, and establishing land banks which would assemble unoccupied real estate. These measures are expected to help stabilize communities and promote the reusing of properties.

Municipal governments are given a maximum of 18 months to obligate the allotted amount. They are later on given four years to spend the entire sum and address the foreclosure situation. If the municipalities fail to satisfy the said conditions, the funds will be recaptured by the federal government.