ST. PETERSBURG, Fla. — The federal government announced Friday that it is relaxing some rules to make it easier for communities to spend funds on redeveloping abandoned and foreclosed properties.
The changes, effective immediately, will allow cities, counties and states to buy properties in mortgage default and uninhabitable homes with code violations through the $4 billion Neighborhood Stabilization Program.
The program was started in the midst of the nation’s foreclosure crisis, but a year later, about a third of the local governments that got grants have barely made a dent in them, said a recent report from the Department of Housing and Urban Development.
Some officials say they’ve had trouble spending the grant money because federal rules are confusing and cash investors can outbid them.
“We need to be more flexible so our local partners can respond to market conditions and reverse the effects of foreclosure in these neighborhoods as quickly as possible,” Mercedes Marquez, HUD’s assistant secretary for community planning and development, said in a statement.
Now a community can buy a property that is at least 60 days delinquent on its mortgage if the owner has been notified, or if the property owner is 90 days or more delinquent on taxes.
