Published: March 21, 2009 08:28 pm      

Miss. focuses $43M from stimulus on foreclosures

JACKSON — Mississippi will soon have $43 million in federal money to help rehabilitate hundreds of foreclosed properties across the state.

The program, however, won’t help homeowners on the verge of losing their houses.

“The purpose of the program is to help those communities, and maybe more specifically neighborhoods, that have been most impacted by foreclosures,” said Steve Hardin, director of the Mississippi Development Authority’s community services division.

Mississippi received the money as part of the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program. The city of Jackson of will receive a separate payment of $3.1 million.

HUD has accepted the plans from both governments.

“When a community has foreclosed housing, it affects them in several ways. Obviously, property values decline and those properties tend to become vacant and may sit for a while,” Hardin said Friday.

As of January, there were 1,235 documented foreclosures in the state. Nearly 30 percent of those foreclosures were located in the Jackson metropolitan area of Hinds, Rankin and Madison counties, according to MDA.

More than 12 percent of those were in DeSoto County, just south of Memphis, Tenn.

Many families have lost their homes as a result of subprime mortgages — loans provided to borrowers with weak credit.

Sen. Doug Davis, R-Hernando, said the only housing sector that hasn’t been affected by foreclosures in DeSoto County are homes valued at $450,000 or above.

“That’s a very small part of the population that can afford those,” said Davis, an assistant vice president at First Security Bank. “Until the housing market is stabilized, it’s going to be very hard” on families.

Hardin said Mississippi will use its money for three initiatives. He said $8 million will go to a home buyer assistance program that will be administered by the Mississippi Home Corp., which was created by the state Legislature in 1988 to help low- to moderate-income families buy homes.

Eligible home buyers can receive a grant for help with down payments and other costs, Hardin said.

Four planning districts will oversee another lease-purchase program aimed at middle-income residents. He said $20 million will be split among the Central Mississippi, Southern Mississippi, South Delta and Three Rivers planning districts. The amount each receives is based on the number of foreclosures in the area.

The state’s third program will focus on Mississippi’s capital city of Jackson, Hardin said.

The state is awaiting proposals from nonprofit organizations about ways to use $20 million of the federal funds to rehabilitate foreclosed property as multifamily developments. The program will target low-income residents, he said.