HUD money available for foreclosures

McALLEN - City leaders are conducting a survey of more than 320 lending institutions to determine the extent of housing foreclosures here.

The results are expected to bolster their case when they apply to the Texas governor's office for a piece of the $101 million the federal government made available to the state to assist with the foreclosure crisis.

City officials hope to take advantage of the Neighborhood Stabilization Program, which provides grants to states and some communities for the purchase of abandoned homes.

The intent is for governments to purchase, rehabilitate and resell homes that would otherwise go abandoned and become blights in their neighborhoods, leading to the decline of property values.

Brent Branham, McAllen's deputy city manager, said the city has to contact all the lenders because there is no reliable clearinghouse for foreclosure information.

"We're basically kind of on our own, to see how good or bad it is," Branham said.

The funding, allocated by the U.S. Department of Housing and Urban Development, was included as part of the wide-reaching foreclosure bill Congress approved over the summer.

McAllen and other cities seeking funding under the program will have to submit an action plan to Austin by Dec. 1.

"We have to figure out what we need and contact the state to get a sliver of the pie," Branham said.

Hidalgo County is also set to receive $2.8 million from HUD to address the rising number of foreclosures.

A total of $3.92 billion was allocated nationwide in response to the crisis.

The county's foreclosure rate of 8.2 percent for the last 18 months is well above the statewide rate of 3.7 percent, according to Hidalgo County spokeswoman Cari Lambrecht.

Hidalgo County was the only entity south of San Antonio granted HUD money.

The funds can be used to purchase foreclosed homes at a discount rate and rehabilitate or redevelop them, according to HUD. State and local governments can use the money to demolish or rehabilitate abandoned properties.

The money can also be used to offer assistance to low- to moderate-income homebuyers, though the money can't be used to prevent foreclosures.

Hidalgo County Judge J.D. Salinas said the funding is merely a drop in the bucket and that the county needs more money to prevent homeowners from losing their houses.

"I'm hoping that somewhere in the $700 billion bailout there is a program to help residents in South Texas," he said, referring to the massive rescue package Congress approved this week for the nation's financial industry.

Branham said although McAllen - like other Rio Grande Valley cities - has an affordable housing program, the proposals set forth by the federal stabilization program is relatively "uncharted territory."

"We hope that we can strengthen our neighborhoods by getting people back into homes or by getting rid of abandoned structures that attract the criminal element or are hazardous to our residents," said Diana Serna, director of the Hidalgo County Urban County Program, in a prepared statement. "We look forward to positively making an impact in the foreclosure rate in Hidalgo County."