Federal Aid Coming to Maryland Communities Affected by Foreclosures
$3.9 billion in federal funds has been allocated by the U.S. Government for the Neighborhood Stabilization Program (NSP) under the Housing and Economic Recovery Act of 2008. These funds will be used to assist state and local governments deal with problems on foreclosures.
The said funds could also be used to purchase foreclosure properties to be sold at lower rates to low-income families. From this fund $10 million went to Prince George’s County in Maryland which sparked a series of arguments between the council and the real estate community.
County council members are planning to give a 7 percent incentive off the purchase price for prospective homebuyers in 12 of the county’s communities that were hardest hit by foreclosures. The incentives will be placed included in their down payments or in their final closing costs.
However, real estate agents and brokers argued that the incentives should be applied to all areas with a flat rate of 3.5 percent of the home’s purchase price. According to them, this can help more people while meeting the requirements of the Federal Housing Administration. Council members rejected the proposal putting priority in attracting people back to these 12 areas that have been severely affected by foreclosures.
Targeted homebuyers are the county’s own workforce coming from the police, fire and education departments. Several of these employees actually live outside the county for lack of better housing incentives.
School officials are saying that the incentives would be a welcome treat for qualified teachers in the country who are slowly flocking to other locations due to lack of good housing opportunities in the county. With this incentive program for rehabilitating foreclosed homes, these teachers could finally avail of affordable homes.
The final plan for the foreclosures fund will be submitted on December 14 to the Department of Housing and Urban Development which will be reviewed at federal level. Until then, the council members and the real estate community should get their acts together and finalize a plan that would be beneficial for all.