COVINGTON - Newton County and the city of Covington have been selected to participate in the Neighborhood Stabilization Program to purchase and rehabilitate foreclosed properties, Board of Commissioners Chairman Kathy Morgan announced Tuesday night.
The county's portion of the funding is $1.74 million and the city will receive about $428,000.
"This doesn't mean we have the money and we can start," Morgan said, adding that the county will receive some additional information in the mail and will have 15 days to respond to whatever is contained in that correspondence.
"We've completed the first hurdle, but there's several other things that we have to comply with to receive the award for the project," she said.
The Neighborhood Stabilization Program was created by the Housing and Economic Recovery Act of 2008, which is being administered on the state level by the Georgia Department of Community Affairs.
The money available to local governments can be used to demolish and redevelop blighted properties and for non-residential purposes, such as the creation of parks.
According to Senior Planner Scott Sirotkin, there were 823 foreclosed properties in the county in 2008. In addition, 28 percent of mortgages are financed by subprime loans, the second highest rate in Georgia.
Properties must be purchased at an average of 15 percent below market value. Properties must be sold at or below the cost of redevelopment to prevent the county from making a profit. The funds must be obligated within 18 months of receipt.
Properties can be purchased directly by the county, through a land-bank or through a nonprofit organization or a development authority. Commissioners have decided to partner with an as-yet unnamed, nonprofit organization.
Morgan said the nonprofit organization would be responsible should new owners default on payments. The nonprofit would also be responsible for maintenance and upkeep, insurance and other costs while the houses are on the market, she said.
Once properties are sold, the money would go back to the county to be used to purchase and rehabilitate more homes.
Sirotkin said about 14 properties could be affected initially, with more to come once some are sold.
County projects that could benefit have not yet been publicly revealed.
The city is partnering with Builders of Hope, a non-profit organization based in North Carolina. Several locations in the city, including the Green Acres neighborhood, have been identified as potential beneficiaries of the rehabilitation.
DCA Commissioner Mike Beatty announced in a Wednesday press release that $54.4 million has been awarded for 23 NSP projects throughout Georgia.
Crystal Tatum can be reached at firstname.lastname@example.org.