Thursday, November 20, 2008

Neighborhood stabilization loans to help Grand Prairie residents buy foreclosures

By Kirk Dickey of Grand Prairie TODAY

A new federal program being administered by the city could mean fewer empty foreclosed homes in Grand Prairie.

Housing and Neighborhood Services Director Bill Hills presented the program to the city council at a recent meeting. In it, $2,267,290 in funding from a HUD Community Development Block Grant, under Title III of the Housing and Economic Recovery Act will be split into a pair of programs to get the homes occupied and refurbished.

The first program is purchase assistance for homebuyers and allows them to take out grants for home repairs, down payments or closing cost assistance of up to $20,000 for houses that have been foreclosed on.

Those applying for the grants must take a homebuyers course and bring a letter of credit in place from a mortgage company in order to qualify for the program.

The program could help 51 families over the next four years and targets average citizens who meet the income qualifications specified by the HUD grant. That is, the combined family income is less than 120 percent of the area's median income.

A quarter of the $2.26 million - $566,000 - must be used to help families that have combined income of no more than 50 percent of the median income.

For example, a four-person family in Dallas County meets the 50 percent median income cap at $33,000 and at $79,000, has an income of 120 percent of the median. In Tarrant County, the marks are $32,000 and $77,000 respectively.

The same income qualifications apply to the second program the city is putting in place. But it has one additional caveat, that the applicant be a government or school district employee.

Under that program, the city would purchase homes, refurbish them and sell them with a 20 percent down payment or closing cost component. Public sector employees, including policemen, firefighters, teachers, city or other government employees working within the city limits or who would be moving to Grand Prairie would be eligible for the program.

The city believes it can purchase and then sell about eight homes a year - in the range of $60,000-$165,000 per home - through the program. Any profit made in the exchange would go back into the program and not the city's coffers, per the HUD program's guidelines.

Both programs are handled through a realtor working with the housing and neighborhood services department.

The remaining component of the federal money will be used for administrative and rehabilitation costs. The funds have to be committed within 18 months and expended within four years. And if there are not enough applicants in one pool, or the other, the city can shift the money to maximize its use.

The programs made at least one councilmember uncomfortable. City Councilman Tony Shotwell was concerned that the city was giving preferential treatment to government employees over average citizens in the second program and would prefer to see all of the money diverted to one program or another.

“It feels like we are giving our people a benefit that we are not giving the general public,” he said. “This is federal money that will be given to just a certain subset of the public.”

Hills answered his concern, saying the program is modeled after existing HUD programs that try to make home buying easier for public servants like police officers and teachers. This, he said, is a spinoff of those programs. He said that he thought that it would be good to broaden it because of the income restrictions. He said the single-parent government employees will benefit most from this program.

Councilman Rick Sala said he understood Shotwell's concern, but saw an upside to the program.

“A long time ago, we waved the requirement that firemen had to live here so we'd have enough of them on the payroll. This might be an incentive for them to move here,” he said.

Councilman Jim Swafford also weighed in on the program, saying he'd recently talked with School Superintendent Susan Simpson about it and she was excited about its prospects.

“Schools are always trying to throw other things into their package to attract new teachers and she was really excited about this program,” he said, adding that she wanted to work with the city on getting information about the program out.

Pegasus News content partner - Grand Prairie TODAY

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• Real Estate > Residential
• Politics and Government > City Government > Grand Prairie

Comments

ch0 Anonymous

Well, it's a start...

7 months, 2 weeks ago ( Link to this comment | Suggest removal )

alexander troup Verified

Let,s keep an eye on this peice of progress,put this subject under the Peg eyeball and plant the seed of hope...until then..A/T,.. freind of Johnny Apple sed in Grand Prairie.

7 months, 2 weeks ago ( Link to this comment | Suggest removal )