La. gets millions in home aid

• By CHRIS GAUTREAU
• Advocate business writer
• Published: Jan 10, 2009 - Page: 1D - UPDATED: 12:05 a.m.

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Louisiana is getting at least $36 million through a multibillion-dollar federal program to address the nationwide foreclosure crisis.

Another $2 million could be headed for the Baton Rouge area, though Mayor Kip Holden said Friday the city is still waiting on a response for its request.

The money is coming via the $3.92 billion Neighborhood Stabilization Program, an offshoot of the U.S. Housing and Economic Recovery Act passed last year and overseen by Housing and Urban Development.

HUD announced Thursday that New Orleans had been awarded $2.3 million through the program, while $34 million would be available statewide.

The federal legislation was a response to the nation’s foreclosure crisis that erupted in 2007, when a wave of homebuyers in some states began defaulting on their mortgages.

Many of the foreclosed homes had been sold on risky loan terms to buyers with poor credit and at prices driven upward in speculative markets.

As the number of foreclosures increased, the resulting crisis spread throughout the U.S. economy.

According to HUD, the Neighborhood Stabilization Program is intended to help communities buy and redevelop foreclosed properties “that might otherwise become sources of abandonment and blight.”

Louisiana’s share of the money will be handled by the Louisiana Housing Finance Agency, which promotes affordable housing projects statewide.

Spokesman Jeff DeGraff said the agency will take a few weeks to create the criteria for handing out the money. But the intent, he said, is to get it quickly into communities where it’s needed.

Louisiana’s allotment will be open to a mix of municipal governments, individuals and private developers as well as for-profit and nonprofit projects, DeGraff said.

Multifamily apartment complexes, rehabilitated properties, redevelopment projects and single-family homes are all possibilities, he said.

“It’s pretty wide open, because the goal is to get the money on the streets as soon as possible,” he said.