September 08, 2010 03:00PM
Adolfo Carrion, regional administrator for the U.S. Department of Housing and Urban Development, awarded $11.6 million to the state of New Jersey and several of its major cities this morning to help stabilize communities that have been devastated by the national foreclosure crisis.
Carrion announced the funding at a press conference with Newark Mayor Cory Booker today, saying that the proceeds will allow various cities to buy up foreclosed and abandoned properties at a discount and rehabilitate them for future use.
“The goal ultimately is to keep people in their homes,” Booker told The Real Deal following the press conference.
Newark officials said the money will allow the city to rehabilitate more than 50 homes across the city, which has been hit extremely hard by the foreclosure crisis. Over the past 12 months, more than 2,500 homes have gone into foreclosure, and lenders have taken title to 960 homes in the city. The foreclosure rate is double the number in 2005, but almost flat over the past two years.
In total, the city of Newark will receive $2 million in Neighborhood Stabilization Program funding; Essex County, which includes Newark and its surrounding suburbs, will get $1.8 million; the city of Paterson will get about $1.2 million, Union County will get $1.57 million and the state of New Jersey will get $5 million.
While the majority of the funding will be used to buy and rehabilitate homes, some of the funds can be used for down payment assistance and closing costs for low- to moderate-income homebuyers. Funds can also be used for so-called land banks, where communities buy up vacant lots and sell them at a nominal rate for development. HUD will publish regulations on how the funds will be allocated and the rules for determining the application process.