LFUCG, REACH to receive money to help stabilize neighborhoods
LEXINGTON, KY – April 30, 2009 – (RealEstateRama) — Gov. Steve Beshear announced that the Lexington-Fayette Urban County Government (LFUCG) and REACH (Resources, Education and Assistance for Community Housing) have been awarded grants from the Neighborhood Stabilization Program (NSP) to help 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 Lexington and REACH will benefit communities by returning foreclosed and abandoned residential properties, including both homes and vacant lots, to productive use while providing new opportunities for homeownership to deserving families.”
Gov. Beshear presented checks for approved projects to LFUCG in the amount of $1,371,047; to REACH for $720,000; and $512,000 for a joint project application to LFUCG and REACH.
LFUCG intends to use its NSP grant to acquire approximately 27 foreclosed, abandoned or blighted residential properties. When possible, the homes will be restored to safe, inhabitable conditions and made available for resell. Blighted properties will be demolished to prepare for the construction of new homes for purchase by income-eligible Lexington-Fayette County residents.
It is anticipated that the newly built or revitalized homes will help increase surrounding property values, strengthening each neighborhood and improving residents’ quality of life.
“Through these grants, Governor Beshear is helping Lexington beat the mortgage crisis that is seriously damaging many other cities,” Lexington Mayor Jim Newberry said. “These funds protect our neighborhoods and through them, our entire community. In addition, they provide new opportunities for affordable housing, a significant need and one we are working hard to address.”
REACH will use the NSP funds for a scattered site housing rehabilitation project. The nonprofit housing development agency will acquire, rehabilitate and resell five foreclosed properties in neighborhoods with the highest percentage of foreclosures and subprime mortgages or areas that are most susceptible to future foreclosures.
REACH and its partner agencies will provide education and assistance in qualifying for a mortgage to first-time homebuyers to purchase the restored homes.
“The award of Neighborhood Stabilization Program funds will have a profound impact on REACH efforts in revitalizing Lexington neighborhoods and to create homeownership opportunities,” said Chris Ford, president and CEO of REACH.
Once REACH or LFUCG have 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. In Fayette County, a family of four earning up to $78,000 per year is eligible to purchase a home. 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.
As joint applicants, the city and REACH will use the $512,000 NSP allowance to redevelop a blighted neighborhood in west Lexington by demolishing five abandoned homes and reconstructing three new homes. This project, known as the Douglass Heights Redevelopment Project, will target the 400 block of Georgetown Street, an area where 67 percent of residents are of low- to moderate-income.
The newly built homes will be sold to households with incomes below 50 percent of the area median, or just over $30,000 for a family of four. Redevelopment is part of Lexington’s larger neighborhood stabilization initiative, which includes the LFCUG land bank, REACH, and Community Ventures Corporation projects, all of which address foreclosed and abandoned residential housing, and the Hope Center project, which is redeveloping vacant property.
“REACH looks forward to partnering with LFUCG and the Department for Local Government, as we engage our neighbors and community leaders in affordable housing redevelopment,” said Ford.
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, received more than $115 million in applications statewide.
Contact:
Jay Blanton
Jill Midkiff
502-564-2611
