DENVER—Promising to help rehabilitate, resell or redevelop foreclosed homes to stabilize neighborhoods and stem the decline of house values of neighboring homes, Gov. Bill Ritter accepted a $34 million check on Thursday from the federal government as part of the Housing and Economic Recovery Act of 2008.
Ritter said Colorado has fared better than other states during the economic crisis, but “we do share in the nation’s foreclosure crisis.”
“Foreclosed and abandoned properties are often targets for vandalism and other types of criminal activity. Having these HUD funds available to help distressed communities is important to keeping these communities stable and safe for the long term,” Ritter said.
Recent figures show completed foreclosures dropped 13 percent last year, but that still meant 22,000 foreclosure sales.
John Carson, regional director for the federal Department of Housing and Urban Development, said Colorado was one of the first states to qualify for the federal grants. Of 308 grants being processed, only 22 have been approved so far.
The HUD Neighborhood Stabilization Program is expected to provide about $4 billion to states and some local communities facing high foreclosure rates with risk of properties being abandoned.
The program allows governments to purchase the foreclosed homes at a discount and rehabilitate or redevelop them to prevent home values from falling.
Governments can use their grants to acquire land and property, to demolish or rehabilitate abandoned properties, to provide downpayment and closing costs to low- and moderate-income homebuyers.
States can also set up banks to assemble, manage and dispose of vacant land.
According to Colorado’s application, applicants asked for $216 million, and the state was allocated only $34 million.
Twelve counties and communities qualified with declining property values ranging from 1 percent to 13 percent, including Adams, Arapahoe, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer, Weld, and Pueblo counties, and the cities of Aurora and Colorado Springs.
The state said it plans to rehabilitate 40 properties to rent to low-income families, buy 120 homes to sell or rent, demolish 45 blighted structures, provide homebuyer counseling to 120 people, help 100 homebuyers purchase and rehabilitate property and use $3.8 million to administer the program.
In addition to the $34 million given to the state, counties and communities also will be getting grants, including Denver, Adams, Aurora and Colorado Springs.
