Published: January 04, 2009 11:02 pm      

County seeks funding to help homeowners avoid foreclosure

Grants would be awarded to middle-income Allegany residents

CUMBERLAND — The Allegany County commissioners are expected to apply for more than a half million dollars to help low- to moderate-income residents avoid foreclosure.

Jim Williams, development coordinator for the county’s Department of Community Services, will provide information during a public hearing today at 9:30 a.m. at the County Office Complex about the Maryland Neighborhood Conservation Initiative.

Maryland has been awarded $26.7 million of Neighborhood Stabilization Program funding from the federal Department of Housing and Urban Development. The county is seeking $660,000 to address abandoned and foreclosed homes in neighborhoods that have been impacted by foreclosure and subprime lending.

A foreclosure activity index map shows Allegany County has fared better than much of central and metro Maryland. Still, homes in ZIP codes 21502 (Cumberland) and 21562 (McCoole) have had a “high” level of foreclosure activity between the first quarter of 2007 to third quarter 2008.

Frostburg’s 21532 ZIP code has a “moderate” activity index while the rest of the county has a “low” rating. The state Department of Housing and Community Development will administer the funds, $17.3 million of which will be grants awarded to eligible jurisdictions in a competitive process.

The grants are to be awarded to “middle-income” homeowners — those who are between 80 percent and 120 percent of the area median income based on the number of people in a household.

Eligible uses include establishing financing mechanisms for purchase and redevelopment of foreclosed-upon homes and residential properties. Those mechanisms can include soft-seconds — which increase home buyers’ purchasing power by avoiding having to pay private mortgage insurance and include lower down payments, lower closing costs and home buyer support — loan loss reserves, and shared-equity loans for low- and moderate-income home buyers.

Boston and Charleston, S.C., have similar programs. The funds also can be used to purchase and rehabilitate homes that have been abandoned or foreclosed upon in order to sell, rent or redevelop those properties. The grants also can be used to establish land banks for homes that have been foreclosed upon, demolish blighted structures, and to redevelop demolished or vacant properties.

For more information on the state Neighborhood Conservation Initiative, visit www.neighborhoodrevitalization.org.

Contact Kevin Spradlin at kspradlin@times-news.com.