Neighborhood Stabilization Plan Is Helping Revitalize Foreclosed Properties

By Jonathan Mummolo and Ovetta Wiggins
Washington Post Staff Writers
Monday, July 13, 2009

As Fort Washington resident Pauline Brown took in the warm evening air from her porch Thursday, an eyesore marred her view: Tall weeds, three feet high in some places, covered the lawn across the street, and overgrown vines blocked the front door. Around back, a rotting deck was separating from the vacant house.

"It's like a jungle right now," said Brown, 71. If someone were to buy the house and fix it up, "it'd be nice. It'd be a relief."

Thanks to a federally funded program, Brown might get her wish.

Counties throughout the Washington area have begun rolling out millions of dollars received under the Neighborhood Stabilization Program, part of a massive $3.92 billion housing bill passed by Congress last summer. The program aims to address the fallout of the foreclosure crisis -- vacant properties that have brought blight, vandalism and crime to their neighborhoods -- by helping localities purchase and repair some of the homes and provide financial help to home buyers.

The federal dollars went to some of the hardest-hit localities, including Prince George's and Prince William counties, and to state governments, which then dispersed the money to local jurisdictions.

Prince George's received a $10.8 million federal grant, the largest of any local jurisdiction in the region, and $2 million from the state's share.

Last week, the county announced its Down Payment on Your Dream program, which will help first-time home buyers with down payments and closing costs on vacant, foreclosed houses in 33 Zip codes in the county. Officials said about $9 million will go toward assisting at least 700 buyers; about $2.3 million will be used by the county to buy and fix an estimated 30 houses, which will then be resold; about $483,000 will go to housing counseling for home buyers; and about $1 million will pay for administrative costs.

Participants in Prince George's must have a household income that does not exceed 120 percent of the area's median household income, adjusted for family size. For example, the maximum income for a family of four to be able to participate is $123,700. For a family of five, the limit is $133,600. Home buyers can receive up to $20,000 through a no-interest, deferred-payment loan. If the buyer stays in the home for 10 years, the loan is forgiven; if he or she moves out before then, part of the money must be repaid.

"We're going to get these houses back on the market," County Executive Jack B. Johnson (D) said at a news conference announcing the program Wednesday, adding that he wanted residents to know that "the American dream of homeownership is within their reach."

The county's plan was approved by the U.S. Department of Housing and Urban Development in March, which started an 18-month clock on committing the funds. Counties have four years to spend the money, said Rosalyn Clemens, who manages the program in Prince George's. Johnson said the county has more than 6,000 homes in some stage of foreclosure.

Last week, Larry and Naisha Dinkins of Greenbelt became the first home buyers to have a loan approved for the program. They plan to use the $20,000 to help buy a $345,000 Upper Marlboro townhouse. The house is in one of 12 targeted Zip codes, the hardest-hit areas in the county, which made the Dinkinses eligible for the maximum amount.

"I probably wouldn't be able to buy that house" without the additional funds, said Larry Dinkins, 34, a heating and air-conditioning technician. "It's a real nice house, for a foreclosure."

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