According to the Federal Department of Housing and Urban Development, Maryland’s Baltimore, Montgomery and Prince George’s Counties are set to receive a further $3 to $6 million this fall, thanks to a grant from Washington that aims to further help local communities purchase foreclosed real estate for re-development. The idea is to provide a steady hand to neighborhoods staggering under the aftershocks of foreclosures that include rock-bottom selling prices that drive the rest of the market down.
The process began in 2008 when Washington handed over a total of $4 billion to State administrations. Each received a base allocation of $19.6 million, with the rest going to targeted areas where the need was deemed greatest. The grants were subject to being used in an approved way within 18 months, failing which the funds would revert to Treasury Department coffers.
This Tuesday, Housing and Urban Development Secretary Shaun Donovan ran out of patience, and announced that not all States appeared to need all of the monies allocated, and that unallocated funds nor committed by this fall would be challenged elsewhere where they could be better spent, based on recent trends in foreclosure rates and vacant property.
“We will not know how much money will be recaptured because the deadline is not here yet,” Donovan added, although he did mention Prince George’s as a likely candidate for further assistance.
According to an unidentified Housing and Urban Development spokesman Montgomery and Baltimore have been earmarked as well. This is despite the fact that just 80% of the $26.7 million allocated to Maryland has been used thus far – that’s because the State expects to have expensed the remaining 20% by the 27 August deadline.
Beneficiary States may use their windfalls to acquire discounted properties for demolition or rehabilitation, or they can apply them in the form of first-buyer deposit and other assistance. They are also allowed to create Land Banks to manage purchased properties and sell them onwards. In the case of Maryland, over half the 2008 allocation has gone on specific projects with over 17,000 homes built, renovated or demolished. This effort has been bolstered by a further grant of $9.5 million received in the course of 2009.
It’s good to know that the State officials in Maryland are using HAMP’s grants wisely and expeditiously – it would have been a tragedy if the funds reverted to Treasury Department when the need remains so great in Baltimore, Montgomery and Prince George’s Counties. The additional monies in the pipeline will be warmly welcomed by officials with too many clients to help.
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