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Md. to get $46.4 million to combat foreclosures

Maryland communities will get more than $46 million to buy and fix foreclosed homes, a signal that the federal government sees risks of abandonment and blight even in the nation's highest-income state.

The funds, announced yesterday by the U.S. Department of Housing and Urban Development, were part of $3.9 billion set aside for "neighborhood stabilization" by the housing rescue law passed in July. Congress wanted each state to get about $20 million at minimum, with more going to areas with higher shares of foreclosures, mortgage delinquencies and risky loans.

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HUD will give $46.4 million to Maryland, much of that to the state government. But some funds will go directly to three jurisdictions: $4.1 million to Baltimore, $2.6 million to Baltimore County and $10.9 million to Prince George's County. All have seen a jump in housing troubles - particularly Prince George's, which had more homes facing foreclosure last year than any other jurisdiction in the state.

"Our intent is to put the money to work in communities with the highest needs," said HUD Secretary Steve Preston. He said states and communities will have 18 months to spend it once they get it. "Time is of the essence."

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Lenders were trying to foreclose on at least 18,000 Maryland homes this spring, according to the Mortgage Bankers Association. That doesn't include the more than 65,000 homeowners who were late on their payments but whose lenders had not yet turned to the courts.

Maryland's share of the stabilization money is a fraction of what larger, hard-hit states such as California and Florida will receive. HUD plans to give each of those states more than $500 million, in part because both have foreclosure rates more than double Maryland's.

But HUD believes Maryland's "abandonment risk" - the chance that a foreclosed home will sit vacant, with no one interested in buying - is about on par with Florida's. It said both states are at "medium" risk, while it labeled California's risk "low."

Baltimore, considered at "high" risk, had been hoping for more than $4.1 million. "We're going to have to alter our plans and change our priorities," said Cheron Porter, a spokeswoman for the city's Department of Housing and Community Development. "It's much less than we were expecting."

Mary Harvey, director of Baltimore County's Office of Community Conservation, said the county's $2.6 million won't be enough to take care of all its foreclosure issues. "I don't want to say we're not grateful for the money ... but certainly when you're talking about acquisition and rehab, it doesn't go very far," she said.

Communities and states must submit plans to HUD before getting neighborhood stabilization funds. They can use their share to buy abandoned foreclosures, which lenders are supposed to sell for less than market value. The money can also be used for rehabilitating or demolishing the properties and helping low- and moderate-income residents purchase them.

Clarence Snuggs, Maryland's deputy commissioner of housing and community development, said the state is waiting for HUD to issue regulations and expects to hand over its plans by December. The state won't buy properties directly but will give money to local governments or nonprofits to do so, he added.

"The key to this is our ability to get on the ground early, to slow the deterioration going on in the marketplace and at the same time to leverage resources," he said.

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St. Ambrose Housing Aid Center wants to participate. The nonprofit group has been buying, fixing and selling foreclosed homes in Northeast and Southwest Baltimore for several years.

Lisa R. Evans, St. Ambrose's deputy director, said the wide range in acquisition and rehab costs makes it difficult to estimate how many houses the city's $4.1 million could touch. But if the government kicks in $20,000 a unit and asks nonprofits to pick up the rest, that's about 200 properties, she noted.

"That's great - that's 200 more than we're doing now - but there's a lot of foreclosed properties out there," Evans said.

hud grants

The U.S. Department of Housing and Urban Development is giving Maryland $46.4 million to get control of vacant foreclosed homes and fix them up. Here's how HUD will distribute the money:

Baltimore: $4.1 million

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Baltimore County: $2.6 million

Prince George's County: $10.9 million

State of Maryland: $28.8 million


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