San Jose receives $5.6 million to help residents purchase foreclosed homes

California Foreclosure News

Article Abstract: the new California foreclosure grant may mean good news for first-time homebuyers. The San Jose local government will use the trickle down affect to help homeowners purchase and fix-up CA foreclosures if used for a primary residence. This is great news as other counties throughout the nation are using the funds for the government to directly purchase the homes, instead of providing funds for individual homeowners.  Keep reading below for the complete California foreclosure news article: 

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By Linda Goldston

San Jose has received more than $5.6 million in federal aid to help local residents purchase and fix up foreclosed homes.

The funds, part of $3.92 billion allocated to all states, were announced Friday by U.S. Housing and Urban Development Secretary Steve Preston. California will receive $529 million of that — an amount that Sen. Barbara Boxer and Dianne Feinstein said was not nearly enough for the state.

"This makes no sense and is totally unacceptable," the senators wrote in a letter to Preston.

The senators said California will get less housing assistance than Florida even though the state has had 274,013 more foreclosure filings so far this year. California's portion of the foreclosure grants amounts to approximately 13 percent of the total funds, despite accounting for more than 25 percent of all foreclosures nationwide, they said.

A HUD spokesman, however, said the source Boxer and Feinstein used for their calculations — RealtyTrac — "is limited in its national outlook. We believe we've developed a fair and thoughtful formula to identify those areas of greater need and essentially did what Congress told us to do."

But in their letter to Preston, the senators said: "it is beyond us how California — which has nearly twice the amount of foreclosure filings than Florida (561,223 compared to 287,210) could receive less assistance ... Entire neighborhoods in several cities, such as Stockton, are being decimated, and this crisis poses a serious threat to the state's economy."

San Jose has not been hit as hard, and the $5,628,282 allocated "will definitely help to begin to address foreclosure issues" in the city, said Jacky Morales-Ferrand, assistant director of the San Jose Department of Housing.

"While it will not help the current homeowner, we're looking at a program that will assist buyers to purchase vacant homes in targeted neighborhoods," she said. "We can help them to purchase it with a down payment and to rehab the home if it needs it."

She said officials were figuring about $150,000 in help, including rehab costs for the estimated 40 potential homeowners they think they can help.

To quality for the aid, the income limit for a one person household is $88,600 and $126,600 for a family of four.

"We'd be loaning the down payment, and the rehab will focus on health and safety issues and some exterior work," Morales-Ferrand said.

The most recent housing survey by the city, between May 1 and July 31, found 2,639 San Jose homes in foreclosure, she said.

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