Pasco County will launch its latest effort next week to pump up the real estate market, this time using $30 million in new federal funds to obtain foreclosed and abandoned houses throughout the county and help people buy them.
An earlier round of federal funding ($19.5 million) had been targeted at the older U.S. 19 neighborhoods of west Pasco, but this $30 million can be used in other parts of the county. That includes the newer homes of central Pasco, where investors were once scooping up as many as 15 properties at a time with balloon and subprime mortgages.
The money comes through the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program.
In Pasco, the program has involved the county and nonprofit housing agencies teaming up to acquire, rehabilitate and resell vacant homes. Those agencies won't be allowed to pay more than $120,000 for a home under this program, said George Romagnoli, Pasco's community development manager, though that doesn't stop them for trying to resell them at a higher mark.
Part of the funding is also aimed at helping moderate- and lower-income buyers (a family of four can make between $29,600 and $71,040 a year) get into the homes.
Depending on their income, homebuyers can get zero-interest loans of at least $20,000 to help with their downpayment, closing costs or repairs. Lower-income residents can get loans for as much as half of the sales price.
Romagnoli said the county structured the programs to ensure that people moving into the homes had the means to stay in them. Homebuyers have to show, for instance, that they won't be paying more than 30 percent of their monthly income on their mortgage.
Before the housing crash, he said, foreclosures had typically happened after homeowners lost jobs or the breadwinner died.
"The latest surge was because they got into houses they couldn't afford," he said. "We're not letting that happen."
A small percentage of money in the first round went to downpayment assistance. But that portion of the program did not fare well, in large part because banks were reluctant to loan money on homes that need extensive repairs, officials said.
Officials expect to have to spend less on repairs on the newer homes in central Pasco than on many of the decades-old homes in west Pasco. That means more money for downpayment assistance.
Pasco has spent or allocated roughly 85 percent of the $19.5 million it got last year in the first round of funding for the Neighborhood Stabilization Program. Overall, the county has acquired more than 200 homes under the program.
It's unclear how the money will affect the county in the long run. But Romagnoli said the program is boosting neighborhoods filled with blighted empty homes. And he said that it appears values are beginning to hold steady vs. continuing to drop.
"I think what we've seen are the markets have stabilized," he said.
Many local governments have struggled to figure out how to spend the money for a variety of reasons. But Pasco is No. 2 in the nation (behind Riverside, Calif.) when it comes to how much of its money it has spent, said Romagnoli.
Only three areas of Pasco have not been eligible because they are not as hard hit by the foreclosure crisis: portions of Seven Springs, San Antonio and St. Leo.
Jodie Tillman can be reached at email@example.com or (727) 869-6247.