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Posted July 2, 2010 | Leave a comment
Purchasing power: Housing grant to help communities fix, resell foreclosures for less
By Linwood Outlaw III -- email@example.com
Thanks to a generous grant from Virginia's neighborhood stabilization program, officials in the Northern Shenandoah Valley have acquired a handful of foreclosed properties and are renovating them to give low-, moderate- and middle-income families affordable housing opportunities.
The Virginia Department of Housing and Community Development recently received $38.7 million in federal funding to pursue such projects through the program, which has awarded grants to 22 local government and nonprofit organizations to help them obtain foreclosed homes at a discount. The plan is to fix up those dwellings and sell them to clients earning up to 120 percent of the area's median income.
The program provides "an opportunity for communities to address the impacts of foreclosure, to stabilize home prices and prevent homes from becoming sources of blight," Bill Shelton, director of the Department of Housing and Community Development, said in a news release announcing the refurbishing initiative.
The Northern Shenandoah Valley Regional Commission received a $2.5 million grant to acquire and refurbish homes in Warren, Frederick and Shenandoah counties. The commission is working in conjunction with nonprofit groups Community Housing Partners, Habitat For Humanity of Winchester-Frederick County, and People Inc. to find qualified occupants for the dwellings.
So far, the regional commission has successfully acquired eight properties, including six townhouses on Comer Drive in Stephens City, a home on Hill Street in Front Royal, and another property on Thompson Street in Strasburg. Three of the homes are on the verge of being sold to potential buyers, said Martha Shickle, community development program manager for the regional commission, whose main office is in Front Royal. The commission hopes to acquire four more homes by Sept. 17, the deadline for all grant recipients to put their funding to use.
"From the federal perspective, the neighborhood stabilization program was created to try to address the large number of foreclosures that were happening across the country, and basically to help communities address the fact that there were a significant number of properties that were sitting vacant," Shickle said. "Our area hasn't been hit as drastically as other parts of the country. But, we did see pockets of significant numbers of foreclosures. In some cases, it's been difficult for the localities to identify the actual property owner, and then to be able to enforce either property maintenance code or other code enforcement issues having to do with the safety and stability of the property."
The neighborhood stabilization program was authorized under the Housing and Economic Recovery Act of 2008 to offer emergency assistance to government entities looking to salvage properties that may be at risk of becoming abandoned or blighted. Fortunately, things appear to be looking up when it comes to the housing market in the Northern Shenandoah Valley, Shickle said.
"The market is turning in this area, which is great news. And, actually, I think we're fortunate," Shickle said. "Some of the other communities are just ramping up their neighborhood stabilization program and expecting to be in the business of buying, fixing up and selling foreclosures for quite a while. We don't think that that's going to be needed in our area. We think that, with fingers crossed, that the market is at least stabilizing, and maybe even turning in this area."
Shickle said clients who purchase properties through the program have to complete an eight-hour homebuyer education program.
The goal is to help mentor the clients and "make them aware that paying for their home needs to be their top priority, and not to get lured into debt that they can't sustain," said Robert G. Goldsmith, president of People Inc., a community action agency that helps low income people in southwest Virginia and the Shenandoah Valley.
The program is of particular benefit to the Northern Shenandoah Valley, which has a lower homeownership rate for moderate income households than the state as a whole, Goldsmith said.
Statewide, organizations have either purchased or have contracts pending on about 140 houses as a result of the program, said Chris Thompson, program manager for the Department of Housing and Community Development.
"Those areas where you have vacant homes, they become a source of blight. They become targets for vandalism, for burglary. And, it hurts the neighbors, too," Thompson said. "Because, neighbors start seeing their property values decline. This is an impact not just for those particular houses that we target, but it's a much broader program."
Those interested in finding out whether they are eligible to purchase a home through the neighborhood stabilization program can call the Northern Shenandoah Valley Regional Commission at 636-8800.
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