SOME HELP TO EASE FORECLOSURE CRISIS

Gazette, The (Colorado Springs), Oct 28, 2008 by PERRY SWANSON

Colorado Springs officials are considering how to spend a $3.9 million grant from the federal government that's meant to prevent neighborhoods from falling into decline after they're hit by foreclosures.

Some of the money likely will be used to help the homeless, and the rest will buy and fix crumbling properties under the outline of a plan the City Council heard Monday.

-- The city has a Dec. 1 deadline to submit a detailed plan to the U.S. Department of Housing and Urban Development.

The money is part of $3.92 billion being parceled out nationwide as part of the Housing and Economic Recovery Act, which President Bush signed July 30. Every state and selected local governments received grants under a part of the act called the Neighborhood Stabilization Program. The local areas were picked based on high rates of foreclosed properties and federal officials' judgment of the risk that property would be abandoned.

HUD regards Colorado Springs as having a high risk for property abandonment, according to data posted on the agency's Web page.

The other parts of Colorado that received money under the program include Denver ($6 million), Adams County ($4.6 million), Aurora ($4.5 million) and the state government ($34 million).

Colorado Springs plans to use part of its grant to buy properties where homeless people can live and get help with problems such as mental illness and substance abuse, said Valorie Jordan, manager of the city's Housing and Community Development department. The city would give ownership of the property to a charity organization, which would also run the support programs, she said. Money for that effort would include $975,000 from the Neighborhood Stabilization Program and $328,000 from a separate federal grant designed to help people who are homeless, she said. Details are being worked out.

The city expects to use the rest of its grant money to buy houses, and likely an apartment complex, that a charity would run as housing for the poor. That side of the effort will likely be a joint program with the state government. The state is required to use its allocation in areas where it's most needed, including Colorado Springs.

City workers are studying patterns in foreclosed properties to decide which are candidates for purchase. Only properties that have been through foreclosure are eligible for the program.

The money could make a difference for a few people in a few places, but it won't turn around the effect of foreclosures in Colorado Springs, Jordan said.

She estimates the city could get about 26 houses with the money, accounting for the price of rehabilitation.

"The impact of that $3.9 million is not really that great, and that's why we're looking at partnering with the state," she said.