Feds send $72 million to region to fight foreclosure

By Alexandra Berzon

Friday, Sept. 26, 2008 | 2:20 p.m.

Nevada state and cities will receive nearly $72 million from the federal government in emergency assistance to acquire and redevelop foreclosed properties, the U.S. Department of Housing and Urban Development announced Friday.

The funding includes $24.3 million for the state, $22.8 million for Clark County, $3.2 million for Henderson, $14.8 million for Las Vegas, and $6.8 million for North Las Vegas.

Nevada has led the nation in the rate of foreclosure for 20 straight months, with one in every 91 properties in the process of foreclosure.

Nationally, a total of $3.92 billion was allocated by Congress as part of the Economic Recovery Act of 2008. Local government formulas were determined by the number/percent of foreclosures, sub prime mortgages and mortgage defaults and delinquencies, HUD said in a statement.

The idea is to address abandonment and blight in areas with high rates of foreclosure, and while HUD emphasizes the use of the money to buy and refurbish abandoned properties, the use of the money is actually somewhat more flexible than that.

The state and the cities have to submit a plan to HUD by Dec. 1 outlining what they'll do with the money, which HUD will review for approval, HUD spokesperson Larry Bush said. They'll have 18 months to spend the funding.

Lon Deweese, Nevada State Housing Division chief financial officer, said the state will hold a series of meetings in the next few weeks to discuss the state's portion of the funding, which he said could go to local governments or other organizations for down payment assistance, fixing up foreclosed neighborhoods, and homebuyer counseling and assistance.

"That's $24 million plus that's not built into anybody's budget," Deweese said. "Depending on how it is allocated and to what types of jurisdictions, the state budget will have to be tweaked to that amount, which means the legislature will have a bite of that apple."

Deweese said a portion of the state's funding may go to Northern Nevada communities since they were not granted their own source of funding from the federal government.

"We think it's going to be important we be sensitive to the fact that all of Nevada has problems in regard to foreclosure and delinquency rates," Deweese said. "This is going to be a large input decision because it is a one-time, highly precious resource in a very charged environment. It's important we get it right."