Franklin City, one of the hardest hit communities in Virginia by foreclosures, has been given a chance to alleviate the effects of the problem. It has received a grant that will allow it to buy from home foreclosure listing.
The $400,000 grant award received by Franklin is part of the federal $9.4 million Neighborhood Stabilization Program (NSP) aimed at helping communities across Virginia buy, renovate and sell foreclosure houses. This grant will allow Franklin to turn abandoned and foreclosed houses into affordable housing.
According to industry experts, the city of Franklin originally requested for a grant of $503,519.91 but only received $400,000. They believed that the amount awarded would not the limit as long as the city can keep producing. They pointed out that the fund reduction may be due to the decline in property values since Franklin first applied for the grant.
Experts said that under the county’s program, the funds will be used to buy abandoned and foreclosed houses at discounted prices, then renovate them and finally, sell them to families who are low and medium-income earners.
The city is mandated to spend the grant within a year upon the receipt of money. It must also profit from the sales, proceeds of which will be returned to the state which in turn would evaluate the needs of the community for additional assistance.
Industry experts described the funding arrangement as similar to a revolving loan fund which will be returned to the state for
reallocation based on the need.
Experts recalled that when Franklin applied for the grant, the city has already four prospective foreclosure properties for the program These properties are located in Oldtown and Meadowbrook neighborhoods. City officials are planning to start the initiative as soon as possible now that they have received notification.
As part of the initiative, the city is planning to recruit an appraiser for foreclosure properties. Buyers who are eligible for the program will be required to attend and complete homeownership education.
Furthermore, homeowners who are low and medium-income earners will not only have a chance to purchase foreclosed houses at low prices but also qualify for assistance for deposit and closing cost under the grant program, HOME.
Currently, Virginia has over 28,000 properties in some kind of foreclosure proceedings, with 16,000 foreclosed or standing a vacant.
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