Housing cost cash to help lucky few

Friday, March 27, 2009

The Calvert County Housing Authority also gets a piece of last year's stimulus pie — about $350,000 — to buy two or three foreclosed homes that it will transform into transitional housing for Project Echo, a nonprofit homeless shelter in Prince Frederick that helps low-income and disadvantaged families get back on their feet. The shelter is building a new site but will lose the use of two transitional houses on the current site's property when it is sold.

About $18.9 million in grants will be distributed through Maryland's Neighborhood Conservation Initiative to local jurisdictions statewide to help stabilize communities hardest hit by foreclosures by providing assistance for would-be homeowners to buy them up.

Details about who can apply to receive the Charles County funding and what the exact requirements are won't be available until official paperwork from the state arrives next month, said Rita Wood, chief of the Charles County Housing Authority. But her original proposal was to provide each recipient, who falls within income guidelines and purchases a home in ZIP codes with high foreclosure rates, such as in Waldorf and White Plains, with about $15,000 at settlement . About 25 percent of recipients must report income that is less than 50 percent of median income, which in Charles County would be about $50,000 per year. The rest must not exceed 120 percent of median income.

"We thought this would be the best way to reach the largest amount of people in the shortest amount of time because the funds have to be distributed really quickly," Wood said.

"We thought it was a reasonable thing to do," said Wayne Boyle, executive director of the Housing Authority of Calvert County, of the organization's proposal for the grant, noting the money comes at a time when residents need it most. "Someone comes in to a shelter, and they can spend up to two years in transitional houses to get their affairs in order. They pay 30 percent of their income for rent. At a minimum we will buy two houses; we might be able to stretch it to three."

The housing authority will lease the properties to Project Echo for $1 per year.

"Because Calvert County is a relatively small part of the foreclosure problem in the state, we do have our share of them," Boyle said. Though Calvert's foreclosures are concentrated mostly in Lusby and in Chesapeake Beach and North Beach, the biggest factors in determining which properties the housing authority will buy depend on the condition and costs of a house.

There are some stipulations — the money can only be used to buy vacant, foreclosed homes and they must be maintained for 15 years, Boyle said. If any income is earned from the project, it must go to a similar activity.

"Most of the folks we're dealing with are 30 to 40 percent of median income," Boyle said. "We're happy to get [the money]. It's solved one of our problems. It really generated some creative thinking about what can be done."

Boyle said he expects to receive funds in May and will have foreclosed homes ready for occupancy by August.

HUD awarded more than $19.6 million in additional funds to Baltimore city and Baltimore, Montgomery and Prince George's counties.

The state anticipates the initiative will create almost 500 units of workforce housing as well as assist as many as 1,000 new homebuyers with down-payment expenses.

"Working with our local and federal partners, we are investing significant resources to sustain homeownership, revitalize communities, provide affordable housing opportunities and encourage smart growth solutions in those communities that need it the most," O'Malley (D) said in a press release.

O'Malley launched Smart, Green & Growing, a statewide initiative under which the NCI operates, to link community revitalization, transportation improvements, economic development, smart growth and environmental restoration efforts.

kkulp@somdnews.com