Saturday, Oct. 31, 2009

A Helping Hand: Federal funds a boon to Stanislaus families

It's taken more than a year to work through the governmental bureaucracy, but federal funds finally are helping Stanislaus County families buy foreclosed homes.

Richie and Cortney Hartsfield will be among the first to benefit. They hope to close escrow by Thanksgiving on a rehabilitated 1,821-square-foot Keyes home.

"If this program didn't exist, we would not be in position to buy," said Richie Hartsfield, who has been living with his wife and two young children in a rented two-bedroom Turlock home. "They're helping us with the down payment."

That help is coming from a $4 billion national program signed into law by President George W. Bush in August 2008.

Called the Neighborhood Stabilization Program, the funds were supposed to benefit foreclosure-racked communities by putting families into vacant bank-owned homes as fast as possible.

Modesto received $8.1 million. Stanislaus County, Ceres, Patterson, Oakdale, Newman and Waterford got an additional $9.7 million.

The program's regulations ended up being more complicated than expected, however, and the cash didn't arrive until this August.

No family has received home buying help from the Modesto program, and city officials are considering altering their approach to make better use of the money.

Down payment and repairs covered

But there is some progress in the program run by Stanislaus County with the five-city consortium. It has purchased 18 previously foreclosed homes, it's in escrow to buy an additional 26 homes and it is searching for more.

"We hope to get six to eight families into their houses by Thanksgiving," said Aaron Farnon, Stanislaus' community development manager.

The county's program buys foreclosed homes at a discount in Ceres, Patterson, Oakdale, Newman, Waterford and unincorporated communities. It hires contractors to refurbish the vacant houses, then resells them to first-time buyers.

Those buyers -- such as the Hartsfields -- will get real bargains because the federal funds will be used to make their 20 percent down payments, plus cover all repair costs.

For example: Say a foreclosed house costs $125,000 to buy and it needs $25,000 in repairs. The home would be purchased and refurbished with the program's funds, then resold to a family that secures a $100,000 private mortgage.

The remaining $50,000 of the home's cost would be covered with federal funds. The buyers wouldn't have to repay that $50,000 unless they sold the home or moved out of it.

"It's only going to cost us about $100 a month more than we're paying now in rent, and that includes taxes and insurance," said Cortney Hartsfield. She said the cul-de-sac home they're buying will be perfect for her young family, and it is near where she and her husband work. "We feel very strongly that the Lord has had his hand in this for us."

The Saundra Court home was built in 2005, and it originally sold for $330,000. It was foreclosed on this summer, and the county program bought it last week for $135,000.

During the past three years, more than 16,400 Stanislaus homes with combined mortgages of $5.5 billion have been lost to foreclosure.

Abeer Horvoth has been trying to buy one of those homes for nearly a year, but she needed help with the down payment. This program provides that, enabling her to purchase a Keyes home for herself and her son.

"It's like a dream come true for me to own a home after so long," said Horvoth, who grew up in Modesto and works in Turlock. "I really look forward to putting my own touches on it."