Rhode Island to Receive $19.6 Million Fund from HUD

October 1st, 2008

Rhode Island to Receive $19.6 Million Fund from HUD
US Department of Housing and Urban Development will provide a fund of $19.6 million to Rhode Island to help in buying and get away with the problem of foreclosure. This program is a part of the $3.92-billion Neighborhood Stabilization Program that aims at controlling the increasing rate of home foreclosure in the real estate. This place has the highest rate of foreclosure in New England. It also has the 6th position nationally in its number of foreclosures in the second half of this year. It has been estimated that nearly 1,700 mortgage holders started their foreclosure activity in Rhode Island in April, May and June.

Sen. Jack Reed, one of the senior members of the Senate Banking Committee said, “Vacant, foreclosed homes can invite crime and drag down neighborhood property values. This federal aid will help protect homeowners and neighborhoods by allowing local communities to purchase and rehabilitate foreclosed homes and abandoned properties across the state.” He is the one who helped in crafting the real estate legislation of funding grants to fight foreclosures.

According to US Department of Housing and Urban Development, the allocation of funds is based on the rate of foreclosures over the last 18 months. The percentage of foreclosures for Rhode Island was listed at 6 percent. The largest share of this fund has been given to California that stands at $529 million. California has a 6.7 percent rate of foreclosure. The state of Massachusetts with a foreclosure rate of 4.6 percent is going to get $54.8 million from HUD along with an extra $11.34 million for Springfield, Boston, Worcester, and Brockton.

Executive director of the nonprofit Statewide Housing Coalition, Brenda Clement said, “Many of these vacant houses have been stripped of their innards, so to restore properties back is an expensive proposition,” These grants from HUD can help the local as well as state governments to buy and also rehab foreclosure property. Apart from that, the low and moderate income homebuyers can also make use of this fund for making their down payments and meet closing costs.

The fund is going to be given by the Community Development Block Grant Program of HUD under 2008 Housing and Economic Recovery Act. The fund from HUD is expected to relieve the pressure of foreclosure on Rhode Island real estate. A law has also been fixed by which distressed homeowners will be able to make a 30-year fixed-rate conventional mortgage.