COVINGTON - Newton County and Covington could benefit from the economic bailout package recently passed by Congress.
The governments have agreed to file a joint application for funds to assist with redevelopment of foreclosed residential properties.
Nearly $4 billion will be distributed nationwide to states and local communities to stabilize neighborhoods and communities impacted by foreclosures. Some $77 million has been allocated to the state of Georgia through the U.S. Department of Housing and Urban Development's new Neighborhood Stabilization Program created by Title III of the Housing and Economic Recovery Act of 2008.
Some of the state's entitlement communities will also receive HUD allocations totaling another $76 million. The money will be administered by the Georgia Department of Community Affairs.
Covington City Manager Steve Horton said it's not known how much could be available to the city and county.
The City Council agreed to move forward with an application Monday. The county followed suit Tuesday, but not before some commissioners expressed reservations.
"The housing market is not the government's responsibility," said District 3 Commissioner Ester Fleming, adding that he would support redevelopment projects for areas in need but could not support buying up private homes.
District 1 Commissioner Mort Ewing agreed.
"I read this three times, and I must say at the end of my third reading, I had more questions than answers," Ewing said of the information provided by the Department of Community Affairs. "My overall concern is that it looks like we're putting the county in the housing business."
But District 2 Commissioner Earnest Simmons said the county should take this chance to keep foreclosed homes from sitting empty and deteriorating.
"If we don't take these funds, it will be a lost opportunity for us," he said.
Given a looming deadline - applications were due to the DCA by today - commissioners went ahead and agreed to move forward with the application, but said they will base future participation on information from Senior Planner Scott Sirotkin, who is attending a housing and redevelopment workshop this week at Lake Blackshear.
The state award is expected to take place Jan. 15. The funds must be used within 18 months after they are received.
According to the DCA, funds may be used for the following purposes:
· The discounted purchase and redevelopment of foreclosed homes and abandoned residential properties
· Establishment of land banks for foreclosed homes
· Establishment of financial tools such as "soft" second and shared equity mortgages and loan loss reserves
· Demolition of blighted structures
· Redevelopment of demolished or vacant properties
In awarding the grants, HUD will take into account the number and percentage of home foreclosures in a state or locality, the number and percentage of homes financed by subprime mortgages and the number and percentage of homes in default or delinquency.
Crystal Tatum can be reached firstname.lastname@example.org.
SideBar: At a glance
Number of foreclosed homes in Newton County
· 2005, 470
· 2008 (to date), 1,050
*Numbers are estimates provided by the Newton County Superior Court Clerk's Office