By Joel Hall
The U.S. Department of Housing and Urban Development (HUD) announced Wednesday that Clayton County has received $3.8 million to continue the work of stemming the tide of foreclosures.
As a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed by President Barack Obama on July 21, HUD awarded $1 billion in funding to states that were hit hard by the nation's foreclosure crisis. HUD said Wednesday that governments in Georgia received a total of $50.4 million, and Clayton County got $3.8 million -- making the county the state's third-highest recipient of funds, behind the state of Georgia and the City of Atlanta.
In a released statement, HUD Secretary Shaun Donovan said the new funding will "reduce blight, bolster neighboring home values, create jobs, and produce affordable housing" in distressed areas around the country.
"These grants will support local efforts to reverse the effect these foreclosed properties have on their surrounding neighborhoods," said Donovan. "We want to make certain that we target these funds to those places with especially high foreclosure activity, so we can help turn the tide in our battle against abandonment and blight."
On Tuesday, the Clayton County Neighborhood Stabilization Program (NSP) said it had successfully spent $9.7 million in federal stimulus funds granted to the county last year for the purpose of purchasing, rehabilitating, and reselling foreclosed homes.
Clayton County NSP Manager Mickie Williams said she believes the county's use of initial neighborhood-stabilization funding was a factor in the most recent award. While given 18 months by HUD to spend its $9.7 million allotment of NSP funds, the county did so in only seven months, she said.
"The whole nation only received $1 billion," said Williams. "For Clayton to come out with $3.8 million is a pretty substantial amount. We certainly know that the county needs the help, because of the foreclosures, and this is going to give us one more tool to address the foreclosure market.
"This [new funding] means we will seamlessly be able to continue the program," she said. "When we add the $3.8 million to the $9.7 million, we're looking at $13.5 million to address foreclosures in Clayton County, and that's really exciting."
Williams said the new NSP funds, as with the previous funds, will work in a "revolving loan" fashion in which mortgage payments made by NSP homeowners will come back to the county to fund new loans. "For every dollar that we spend," she said, "we should have a return on that investment by 90 percent. The program ends in 2013, so those funds will roll over until that time."
Williams said the county is currently facing an average of 900 foreclosures per month. She said current plans are to use the new funds to finance the following: Federal Housing Administration 203k rehabilitation loans, which allow homeowners to purchase and rehabilitate homes under the same mortgage, thus reducing closing costs; and mortgage assistance to people purchasing foreclosed homes that have not already been acquired by the county.
"We are encouraging people to buy foreclosed homes off the market, and by doing so, we will stabilize neighborhoods," Williams said.