Salem, OR – August 27, 2009 – (RealEstateRama) — Governor Ted Kulongoski announced today that Oregon Housing and Community Services has awarded $4 million to nonprofit housing entities to purchase and rehabilitate foreclosed properties. Concentrations of properties qualifying for these grants are located in rural areas of the state and include areas of high foreclosure.These awards encompass the competitive portion of $19.6 million in federal funds allocated by the Neighborhood Stabilization Program (NSP) announced in January 2009, through the Housing and Economic Recovery Act of 2008, for communities severely affected by subprime mortgage failures.
“This demonstrates the importance of federal support in grappling with the trauma brought on by the subprime meltdown and resulting foreclosure crisis,” Gov. Kulongoski said. “This will not stop foreclosures, but it can keep neighborhoods from further decline and provide affordable homeownership and rental housing.”
Successful recipients are:
- Community Services Consortium ($600,000), targeting Albany, Lebanon, Lincoln City and Toledo.
- Umpqua Community Development Corporation ($900,000), targeting Sutherlin, Coos Bay, North Bend, Green and Roseburg.
- Central Oregon Regional Housing Authority, dba Housing Works ($600,000), targeting Deschutes, Jefferson and Crook counties.
- Habitat for Humanity of Oregon, Inc. ($400,000), targeting LaPine, Albany, Stayton and Dallas.
- Habitat for Humanity of Oregon, Inc. ($500,000), targeting Crook County, Junction City, Lebanon, Lincoln County and Newberg.
- Community Connection of Northeast Oregon, Inc. ($500,000), targeting Baker, Grant and Union counties.
- Housing Authority of Yamhill County ($500,000), targeting the Willamette Valley, McMinnville and Newberg.
This $4 million distribution comes in addition to $11.6 million delivered earlier by Oregon Housing and Community Services to designated communities. They are typically metropolitan areas where significant foreclosures have threatened neighborhoods: Portland/Multnomah County, Gresham, Clackamas County, Washington County/Beaverton/Hillsboro, Salem, Eugene, Springfield, Medford and Bend.
The remainder of the $19.6 million includes $2 million distributed directly by OHCS, principally for down payment assistance, and $2 million to cover program costs.
This NSP funding was authorized by the federal Housing and Economic Recovery Act of 2008. The money was distributed to states and other jurisdictions by the U.S. Department of Housing and Urban Development (HUD).
“Our aggressive stance in going after NSP dollars and other federal funds will pay the state back by helping keep Oregon livable,” OHCS Director Victor Merced said. “We see this as a significant tool in stimulating the state’s economy in addition to stabilizing neighborhoods.”
NSP is not designed to solve the foreclosure crisis. It is aimed at stabilizing neighborhoods plagued by foreclosure, thus preserving the value of nearby homes.
A major change in the NSP rules has been put in place to stoke the sale of these properties. The new rule requires the properties be discounted by at least 1 percent – not the earlier 15 percent – below their current appraised value. Lenders holding the foreclosed properties perceived the higher discount as an impediment to making sales because it increased their losses.
Twenty-five percent of the NSP money must be used to help persons and families who earn 50 percent or less than the area median income (AMI) for the locale in which they live. Beneficiaries may not earn more than 120 percent of AMI. Across Oregon, this varies from $60,000 to $84,950 per year for a four-person family.
The NSP money provides successful competitive applicants with the funds to acquire, rehabilitate, demolish and redevelop foreclosed properties – single family or multifamily – held by banks and other lenders.
Separately, OHCS, in concert with a consortium of public entities in the state, has applied to HUD under a second Neighborhood Stabilization Program, or NSP2, through a competitive application. NSP2 was authorized by the American Recovery and Reinvestment Act of 2009.
Oregon Housing and Community Services is the state’s housing finance agency and community services program administrator. The department provides financial and program support to create and preserve opportunities for quality, affordable housing serving Oregonians of lower and moderate income, and administers federal and state antipoverty, homeless, energy assistance and community service programs.
Go to http://www.ohcs.oregon.gov/.
Dona Lanterman, 503-986-2120, dona.lanterman (at) state.or (dot) us
Rich Malloy, 503-986-2142, rich.malloy (at) state.or (dot) us
Floyd Smith, 503-986-6747, floyd.smith (at) state.or (dot) us