Federal funds meant to ease valley’s foreclosure problems

By Jeff Pope

Tuesday, July 7, 2009 | 1:59 a.m.

Clark County and the three cities in the valley will be asking the federal government for $368.2 million to fund programs aimed at easing the foreclosure problems in Southern Nevada.

The local governments likely will submit their application next week for the second round funds available in the Neighborhood Stabilization Program, which is part of the $787 billion federal economic stimulus package.

The U.S. Department of Housing and Urban Development has $1.93 billion to distribute throughout the country to try to stabilize communities that have suffered from home foreclosures and abandonment.

The county, Las Vegas, North Las Vegas and Henderson banded together to form a consortium to improve the chance of landing as much of the requested funds as possible.

The county is the lead agency and commissioners will review the request at their Tuesday meeting. The cities then will need to approve the application. The deadline to submit it is July 17.

HUD will determine the final amount given to the Southern Nevada consortium, likely sometime between September and February, said Mike Pawlak, manager of the county’s Community Resources Management Division.

“This is really a national competition and I expect it will be really competitive,” he said. “But by collaborating all the jurisdictions in Southern Nevada, we have a pretty strong case to make.”

The local asking price amounts to about 19 percent of the available federal funds.

It’s a large piece of the national pie and whatever money received will help but still won’t end the Las Vegas metropolitan area’s foreclosure crisis, Pawlak said.

The selected areas in the valley where the money will be spent earned an average HUD “Need Factor” rating of 19.93 for foreclosures and an average vacancy rating of 17.3. The maximum score is 20.

“The foreclosure issue is extremely pervasive here,” Pawlak said. “And then we’re facing rising unemployment and the loss of thousands and thousands of construction jobs. So I think we’ve been disproportionately impacted by the foreclosure crisis and all related things that go along with that. It will help. It won’t solve the problem.”

Whatever money the consortium does receive will be used for new homebuyer counseling, down payment and principal reduction assistance and redevelopment of older residential properties and vacant lots.

The four local governments received $46.9 million combined in the $4 billion first round of NSP funding in February. The local entities also received a portion of the $24.2 million given to the state.