With 777 homes in Fayette County identified as foreclosed properties, county and city officials are looking at a federal program that would provide up to $1.17 million toward fixing the problem.

The funds would come from the neighborhood stabilization program of the federal housing and economic recovery act of 2008, County Administrator Jack Krakeel told the Fayette County Commission last week.

Krakeel said he has met twice with local city managers to figure out how best to structure the program to help Fayette foreclosures. Instead of outright purchasing foreclosed homes, Krakeel is proposing a down-payment assistance program to help people purchase foreclosed homes.

The program could only be used on foreclosed homes, not for homes currently on the market, Krakeel said.

Krakeel said he has spoken to local bankers who think there is a need for this type of program in Fayette County.

The proposal is the subject of a public hearing hosted by the commission tonight at 7 p.m. at the county administrative offices.

The county would have to establish the criteria for the program including the level of income and other thresholds required of applicants, Krakeel said. That data would be based on the area’s median income and the size of the applicant’s family, he added.

Fayette officials have had to scramble to meet the program’s guidelines for making the application this week, Krakeel said. If the county doesn’t apply, the funds would be reallocated elsewhere, he added.

In return for administering the program the county could be repaid about $64,000, Krakeel said. It’s possible that the banking community will oversee the fund distribution, although the county will be the “bearer of the funds,” Krakeel said.

The program will take “considerable” time from staff, Krakeel said, adding that he thinks the effort will be worthwhile.

“I think it could be a valuable instrument to help us move foreclosed properties in Fayette County,” Krakeel said.

The program requires no local matching funds.

Although other communities are using the federal funds to buy entire foreclosed properties, Krakeel said the $1.17 million tabbed for Fayette wouldn’t go far with the county’s high property values.

F’ville goes in with county on foreclosure help

By BEN NELMS

The agenda for Thursday night’s meeting of the Fayetteville City Council will be short, but will carry an item reflecting the national foreclosure crisis.

Council members will learn about the state/federal Neighborhood Stabilization Program that provides emergency assistance to local governments to help with the rising number of foreclosures. Fayette County is eligible to receive $1.158 million.

Planning and Zoning Director Eldridge Gunn said in a Jan. 7 memo that U.S. Department of Housing and Urban Development (HUD) is providing the assistance.

“In the past, these types of funds were allocated through Community Development Block Grant (CDBG) entitlement communities, but because of the foreclosure crisis, these funds have also been opened up to non-entitlement communities like Fayetteville and Fayette County to participate as well,” Gunn said.

“Through the state Department of Community Affairs, Fayette County is eligible to receive approximately $1.158 million dollars to assist with stabilizing neighborhoods. This grant program does not require any local match funding,” Gunn said.

Gunn said city staff met the Peachtree City and the county to determine the feasibility of a joint application to maximize the utilization of funding. The group decided that it would be best for the county to apply with input and support from the cities instead of filing joint applications because of the application date (Jan. 15) and the public hearing requirements that are involved.

Gunn said the group decided on two main goals. The first would be to provide direct down payment assistance to qualified purchasers of foreclosed properties. The second goal will be to provide a funding pool to assist local governments in ensuring that foreclosed properties do not become nuisance properties due to lack of exterior maintenance.

The move requires no official action by the city council.