The Department of Housing and Urban Development, or HUD, has received a grant package that totals almost $4 billion to aid cities and states embroiled in mortgage foreclosures. These funds actually were put aside for this purpose in the recently passed Housing and Economic Recovery Act.
The effort has a fitting name, The Neighborhood Stabilization Program, and its aim is to let local and state governments use the available money under certain guidelines. They can tear down or restore abandoned homes and buy land temporarily to stabilize deteriorating areas and then promote redevelopment.
Possibly the more pro-active aspect of it is that they can also provide low- and moderate-income home buyers closing cost and down payment relief. If many of the foreclosed homes can be sold to owner-occupants, there would be less need for the local authorities to get involved in rehab and land purchase activity. That would be the easiest and fastest way to turn around areas with many foreclosed houses. The bulk of this grant money, therefore, ought to be directed to this particular segment.
HUD will use need-based criteria how to allocate the funds. Every state will receive something but areas hardest hit will receive the most. Foreclosure rates, mortgage defaults and subprime exposure understandably dominate the selection process. Las Vegas, North Las Vegas and Henderson, Southern Nevada in short, are then in a position to get a rather generous share for reasons well-known to anyone who follows the local real estate market. If the grants coming here are used wisely, they could also help steady the declining property values throughout the valley. Who wouldn't want that?