The U.S. Department of Housing and Urban Development (HUD) has released $16.5 million for the initiative to help neighborhoods hardest hit by the foreclosure crisis. Polk County and its municipality, Lakeland in Florida will apply for the funding to purchase, fix and sell bank foreclosed homes.
The money, part of the federal Neighborhood Stabilization Program I, will be used by Polk and Lakeland to purchase a growing number of bank foreclosed homes, renovate them and sell them at discounted prices to qualified buyers.
Lakeland was chosen to be one of the recipients of the federal grant because the municipality met the HUD requirement as an area in distressed. HUD evaluates areas that will receive the federal funding based on excessive number of foreclosed houses, including properties financed by subprime loans and delinquent homes that are behind in mortgage payments.
The $16.5 million federal grant will be used to purchase about 166 homes in various neighborhoods across Polk with high number of bank foreclosed homes.
The county will receive an estimated $14.5 million. The money will be used to buy foreclosed houses in Auburndale, the area of Wabash Avenue and Combee Road, Eaton Park, Jan Phyl Village, Inwood, Poinciana, South Lake, Kathleen, Wahneta and Wales.
Meanwhile, Lakeland is set to receive $2 million to be spent mostly in the city’s northwest area where foreclosures are highest.
Local officials said that they plan to reinvest proceeds from property sales in hopes of purchasing additional 100 or more foreclosure properties in the next four years. The Keystone Challenge Fund, a counseling agency and nonprofit home lending, will be in charge of overseeing the buying, renovation and mortgage applications. Keystone Challenge executive director Jeff Bagwell said that the agency plans to buy, rehabilitate and sell the repossessed homes as quickly as possible so that it could buy more units.
On the other hand, Polk County is also applying for additional $15 million under the Neighborhood Stabilization Program (NSP) II to purchase more distressed properties. Industry experts projected that foreclosure filings in the county this year will reach 11,846, a considerable increase from the 9, 467 the previous year.
Under the program, homeowners who lost their properties to foreclosures may qualify to purchase rehabilitated bank foreclosed homes if they successfully meet the requirements.
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