Carson City, NV – October 22, 2008 – (RealEstateRama) — Governor Jim Gibbons today hosted the first meeting of his Housing Recovery Act Implementation Task Force, opening the formal discussion regarding how the state and local governments will leverage their funding allocation from the federal housing bailout this summer.
During the meeting the Governor announced the creation of a pilot program where the Nevada State Housing Division will partner with local governments to help families purchase vacant, foreclosed homes in neighborhoods that are particularly troubled by foreclosure.
“By utilizing a portion of this federal funding for this pilot project, the state and local governments can help take some vacant homes off the market, get qualified buyers into these homes and help rejuvenate these neighborhoods that have been dragged down by a glut of foreclosures,” the Governor said.
Through the Neighborhood Stabilization Program in the federal Housing and Economic Recovery Act, the state received a total of nearly $72 million, the majority of which was directed to specific communities in Clark County. The state received nearly $24 million to distribute throughout the state to areas of greatest need.
The state must submit an application to the U.S. Department of Housing and Urban Development by Dec. 1 to get federal approval of how the state and local governments will utilize the funding. The Governor created the Housing Recovery Act Implementation Task Force to coordinate this application and the plans by local governments in order to maximize these resources.
“Obviously, $72 million is not a lot of money when looking at the size of the housing foreclosure problem in Nevada,” the Governor said. “During these tough economic times, however, this funding provides an opportunity to help communities in need. We need to work together to ensure that we wring every ounce of benefit out of this funding.”
The task force, which was chaired by Wells Fargo Regional President Kirk Clausen, also included Applied Analysis Partner Jeremy Aguero and representatives from Clark County, the City of Las Vegas, the City of North Las Vegas, the City of Henderson, the City of Mesquite, the Nevada League of Cities and the Nevada Association of Counties. The specific communities represented on the task force were those identified by HUD for direct funding.
Also attending the task force meeting and included in the discussion were representatives of Washoe County, the cities of Reno and Sparks, the Nevada State Housing Division and the State Department of Business and Industry.
Per the federal legislation and regulations written by the Department of Housing and Urban Development, the funding must be used to address problems created by homes that have already gone through foreclosure and cannot be used to prevent additional foreclosures. Such uses could include the purchase of homes, demolition of blighted properties and creating financing mechanisms to purchase or redevelop foreclosed homes.
The Governor’s proposed pilot program would create a financing mechanism by partnering with local governments, tentatively identified as the cities of Reno and Las Vegas, as well as Clark County, to negotiate the purchase of foreclosed homes in troubled neighborhoods by working with the state Housing Division to find qualified buyers through the existing first time homebuyer program.
The pilot program, which is still to be approved by the local governments, would allocate $2 million to each jurisdiction and requests a local match. Aside from the purchase of homes, the pilot project money could be used for down payment assistance for buyers, cleaning up abandoned properties to make them ready for purchase and offering home buyer education, among other uses.
“We got into this housing crisis one home at a time, and we’re going to get out of this housing crisis one home at a time,” the Governor said.
After holding back $6 million for the pilot program and $728,623 for total program administration costs, the state is left to allocate $17,558,627 to local governments throughout the state. The State Housing Division has proposed allocating that funding by percentage of population within the state.
Under that formula, Clark County will receive $12,703,042, Washoe County will receive $2,717,390 and the rural counties will share $2,138,196. Those counties will be given authority to decide how to distribute those funds to the governments within their jurisdictions.
The task force has agreed to meet again by conference call next week to update each jurisdiction’s planning activities.
# # #
Ben Kieckhefer, Communications Director (775) 684-5667
Office of the Governor . 101 North Carson Street . Carson City, NV 89701 . Fax: (775) 684-7198
Grant Sawyer State Office Bldg . 555 East Washington, Suite 5100 . Las Vegas, NV 89101 . Fax: (702) 486-2505
