Richmond, Federation of Appalachian Housing Enterprises to receive money to help stabilize neighborhoods
RICHMOND, KY – April 27, 2009 – (RealEstateRama) — Gov. Steve Beshear today announced that the city of Richmond and the Federation of Appalachian Housing Enterprises, Inc. (FAHE) have each been awarded grants from the Neighborhood Stabilization Program (NSP) to help low-income families and individuals purchase homes that have been foreclosed and abandoned in the wake of the country’s economic crisis.
“Vacant housing can have a very negative impact on neighborhoods by inviting crime and blight and bringing down surrounding property values,” said Gov. Beshear. “The plans funded for Richmond and FAHE will benefit communities by returning vacant lots to productive use while providing new opportunities for homeownership to deserving families.”
The city of Richmond was awarded $1,268,933 to acquire, rehabilitate or and sell foreclosed properties that might otherwise become sources of abandonment and blight within their communities. Should a home or building be in extreme disrepair, the city may demolish it and construct new homes in its place.
Once the city has purchased and made any necessary repairs to foreclosed homes, families with a household income not exceeding 120 percent of the area median income may buy or, in some cases, rent the home at a reduced rate. The NSP plan seeks to protect potential buyers by requiring that they obtain a mortgage loan from a lender who agrees to comply with sound lending practices. Homebuyers must also receive at least eight hours of housing counseling from a HUD-approved housing counseling agency.
FAHE, which is based in Berea, will use NSP funds to buy formerly foreclosed properties in Appalachian counties to resell to qualifying individuals with an income at or below 50 percent of the area median.
FAHE is still determining how many homes they will be able to purchase and where the properties will be located. The NSP investment can be used as a first or second mortgage financing to make the home affordable for the family.
FAHE intends to sell the houses to households that include members with physical or mental disabilities or will sell them to formerly homeless persons such as victims of domestic violence.
“Our organization is excited to be a recipient of NSP funds, especially since it is the first major piece of legislation to come from HUD with new money attached to it in over 15 years,” said Vonda Poynter, director of consulting for FAHE. “Making housing affordable is FAHE’s foundation so this is an ideal opportunity for us to use these funds as a piece of subsidy financing to put targeted populations into home ownership.”
FAHE will also help each household find a safe, fixed-rate mortgage loan that the family can afford.
Kentucky’s NSP total statewide allotment of $37.4 million is funded through HUD under the Housing and Economic Recovery Act of 2008. The program, administered by the Department for Local Government (DLG), received more than $115 million in applications statewide.