Prince William County officials are preparing to use $4 million they have received from the federal government to help the county ease its foreclosure crisis.
The $4.1 million from the Department of Housing and Urban Development comes as part of the $700 billion federal bailout package that passed Congress on Sept. 26.
County Executive Craig Gerhart said the money is just one step in handling the daunting rash of foreclosures in the county.
“None of us believe this money will completely solve the foreclosure situation,” he said, stressing the need “to tackle things one at a time.”
More than $2 million will be used for the county to buy up foreclosed properties, while about $1 million — required by the federal Neighborhood Stabilization Program — will be used to fund projects for residents with household incomes at or below 50 percent of the area median income, which is $99,000.
Nonprofit organizations or faith-based groups such as Catholics for Housing or Action Through Service will compete for the funds, then buy and redevelop properties to prepare them for low-income residents, Gerhart said.
To ensure reception of the $4 million, the county must submit an amendment to its annual housing plan by Dec. 1.
To qualify for the program, household income must be at or below 120 percent of the area median income. Down payments would cost 50 percent of the required down payment or 1.75 percent of the contract sales price, whichever’s less.
“Sometimes what’s keeping people from these [homes] is the down payment,” Gerhart said.
The county also is expected to expand its programs in fiscal 2010. The number of homebuyers the Office of Housing and Community Development will be able to assist is projected to increase from seven to 50, and private mortgage financing generated is projected to increase from $170,000 to $10.1 million.
The number of rehabilitations to substandard single-family housing is projected to increase from 15 to 45, based on the revised outcome.
