By Jeremy Twitchell (contact)

Wed, Nov 26, 2008 (midnight)

Henderson is in line to receive more than $4 million in federal and state money to help it recover from the foreclosure crisis, but city officials don't like where the money has to go.

The money is part of the Housing and Economic Recovery Act passed by the U.S. Congress in July, which set aside nearly $4 billion in grants to help areas hardest hit by foreclosures.

The money comes with the directive that it be used to help home buyers purchase foreclosed properties and that the city purchase foreclosed homes to rent to low-income families. The money cannot be used to help families who are facing foreclosure.

The federal government is calling it the Neighborhood Stabilization Program.

In a public hearing about the funds last week, Councilman Jack Clark expressed disgust with the program and called it a thinly veiled bailout for banks holding foreclosed properties.

"It's offensive to me that we continue to bail the banks out and we have the nerve — Congress has the nerve — to call this a neighborhood stabilization program," Clark said on Tuesday.

Mayor James B. Gibson echoed the criticism.

"This isn't really what we were expecting, to be honest with you," Gibson said. "When we saw the action of Congress earlier in the year, we were hopeful that we would see help for families facing foreclosure. … To see a program that only focuses on properties that have already been foreclosed on is disappointing."

The only redeeming aspect, city officials agreed, is that the program will help first-time home buyers and cut down on the number of unkempt, uninhabited homes.

The program will provide help with down payments and closing costs for home buyers, but it will have limitations, Neighborhood Services Director Skeet Fitzgerald, who will oversee the program, said.

First, to be eligible, a household may make up to $76,680 per year — 120 percent of the median income for Clark County.

Second, the home must be in an area of the city where the median income is also below the 120 percent benchmark as measured by U.S. Census data. That means homes in more affluent areas like Sun City Anthem and Seven Hills, which have been hit hard by the foreclosure crisis, are not eligible, Fitzgerald said.

The city is focusing on three parts of town: the older Green Valley area, between Sunset and Warm Springs roads and Green Valley Parkway and Valle Verde Drive; the Valley View area, around Center Street and Major Avenue; and the downtown area.

Anyone receiving help will have to attend at least eight hours of home ownership classes, he said.

Fitzgerald said the city plans also to buy foreclosed properties and turn them over to nonprofit agencies that will rent them to low-income families.

The city does not expect to receive the money until March 1, Fitzgerald said.

Jeremy Twitchell can be reached at 990-8928 or jeremy.twitchell@hbcpub.com.