Millions in funding for a housing pilot program that would go toward restoring communities affected by the 2008 foreclosure crisis in Prince William County will be promised by two major financial institutions and a Virginia housing agency Monday, according to Virginians Organized for Interfaith Community Engagement.
Prince William suffered more than 20,000 foreclosures during the housing market collapse and was the hardest hit locality in Virginia, according to the coalition of interfaith groups, which has organized around housing issues in the county.
The $30 million pilot program would buy and rehabilitate about 100 vacant, blighted townhouses and provide for 1,500 affordable rentals in some of the Prince William communities most affected by the collapse — around Dale City, Georgetown South in Manassas and Williamstown in Dumfries.
Bank of America has decided to commit $10 million in low-interest loans, while General Electric would invest $5 million and the Virginia Housing Development Authority would invest $15 million in similar funding under a plan outlined by the interfaith organization, the group’s leaders say. The long-term loans would be repaid through housing sales and rentals, and the program would be managed by area housing nonprofits.
Leaders hope that millions more in similar financing would eventually be provided by the financial institutions. Prince William’s pilot program is modeled on a successful effort in East Baltimore, and similar efforts have been made in Cleveland, Milwaukee and elsewhere to stabilize neighborhoods through affordable homeownership. The group’s organizers said that Bank of America, General Electric, the former owner of WMC Mortgage and JPMorgan Chase were the primary lenders for foreclosed homes in the county.
Many of the loans, they say, were offered at “subprime” rates, with little documentation required in low-income, minority communities in Prince William. The advocates say that the banks should be held responsible for their role in the crisis.
In addition to the institutions that have pledged support, the group’s leaders said they also are seeking a financial commitment from JPMorgan. Advocates say the housing pilot program may not come to fruition without JPMorgan’s support.
The Rev. Clyde W. Ellis Jr., a leader of the group and the head of Mount Olive Baptist Church in Woodbridge, said he was in touch with JPMorgan executives Friday and hoped to come to terms by the Monday meeting. “What they’re offering doesn’t quite get us to where we need to be,” he said, declining to elaborate on the terms of the potential deal.
A JPMorgan spokesman could not be reached Friday.
Overall, Ellis said the financial institutions have come a long way in their response to the foreclosure crisis. But neighborhoods, he said, face new pressures as investors buy large volumes of property. “They’re trying to flip a buck,” Ellis said of investors. “We’re trying to make sure we put homeowners in there, people who have a stake in the community.”
Ellis said that personal commitments from the three bank chief executives — through meetings brokered by U.S. Sen. Mark R. Warner (D-Va.) — have pushed negotiations forward.
Andrew Plepler, a senior executive at Bank of America, said the state’s subsidy was key to the bank’s commitment. If successful, the pilot program could be a boon for future deals, he said. “Sometimes it’s the first deal that generates some momentum in the market and that could create other opportunities,” he said.
People involved with churches, synagogues and other institutions that are part of effort expect to formally hear the commitments at a meeting at 7:30 p.m. Monday at Woodbridge Middle School.