Local governments are trying to dispense federal funds quicker than before to communities affected by Virginia foreclosures as the deadline set by the U.S. Congress to allocate federal funds approaches.
Communities getting weighed down by high number of properties under foreclosed home auctions are receiving financial help from the state government. As of July 12, Virginia has issued more than half of the federal funds worth $38.7 million that it received from the Neighborhood Stabilization Program (NSP) to neighborhoods that have been deteriorating due to the housing market crisis.
The NSP program was launched by the federal government to finance improvement efforts among neighborhoods that are suffering from numerous foreclosures, including Suntrust real estate foreclosures and other bank foreclosures, and from high numbers of vacant and abandoned houses. Four months ago, Virginia was not even close to using a third of the funds allocated to it by the federal government.
The funds will be used to purchase empty properties and improve neighborhood conditions in the hope that more people will be attracted to buy foreclosure properties for sale in these areas, thereby preventing them from becoming blighted. The quicker pace for doling out funds has been adopted in almost all counties of Virginia.
In Prince William County, around 62% of the federal funds for Virginia foreclosures have been issued to neighborhoods that merit such help. Prince William has been allocated a total of $2.56 million of NSP funds. Meanwhile, Fairfax County has used 44% of its funds, which has a total worth of $2.8 million. This is a marked improvement for Fairfax which has only used a quarter of its allocation back in March.
When it comes to nationwide figures, around 70% of the whole NSP U.S. funds have been allocated, a vast improvement considering that last March, less than 40% of the $3.92 billion package has been issued to communities in need. The quickening pace is mainly due to Congress' order to allocate the funds by September or they will revert back to the federal government.
Recently, the government has added another billion dollars to the total NSP funding program, which brings the total amount of funds for foreclosure-related concerns to $7 billion. According to local officials, they are hoping to get more from the second round of funding to help other local neighborhoods affected by Virginia foreclosures.
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