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.
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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."
Frances Benge also is thrilled federal money will help her buy a home.
"I've lived in Stanislaus County my whole life," said Benge, 28, a single mom with a son and daughter. "I never thought I'd be able to clean up my credit as fast as I did and be able to find a program like this."
Program has strict criteria
Only credit-worthy, first-time buyers who attend federally approved housing counseling are allowed to participate in the program. There also are income limits. For example: A family of four cannot earn more than $71,500 a year.
"It seems overwhelming in the beginning," said Benge, recalling how much paperwork was involved. But it allowed her to buy a Salida home on Rulon Court, not far from where she works. "People are crazy not to take advantage of this. It's an awesome program."
One thing Benge is particularly excited about is that she's getting to pick the colors of the new appliances and paint, which are part of the repairs being done on the home.
Most of the houses the county is buying will get new carpet and paint, plus assorted appliances, windows, doors and fixtures.
"The items we're putting in are high quality. They're not cutting any corners," assured Joe Amirfar of Amirfar Construction. His Modesto firm is rehabilitating four of the homes. "We're redoing everything that needs to be done. And everything in the home is going to match, right down to the doorknobs."
The county is spreading around the construction work to help stimulate the economy.
John Costa of CJ & Me Construction in Manteca is working on one of the Ceres homes.
"It's having a positive effect," said Costa. "I use a pool of subcontractors, and this lets me employ them, too."
Competing with other buyers
Don Borgwardt, the housing development and construction supervisor for the Housing Authority of Stanislaus County, is running the acquisition and rehabilitation part of the program.
Despite the vast number of foreclosed homes in Stanislaus County, Borgwardt said they have been very difficult to buy. "On one house we wanted, we had 34 other offers competing with us."
But the county has been able to buy some sets of homes directly from banks, rather than through traditional real estate channels.
One deal in the works is for the program to purchase eight never-lived-in houses, plus three lots, in Ceres for $726,000. Those homes were built in 2007 on San Pedro Avenue and San Juan Road, but the subdivision was foreclosed on before it could sell any houses.
Borgwardt is on the hunt for more vacant homes to buy. Some of the houses sought will be demolished and replaced with new construction.
That's the case for a $35,000 run-down two-bedroom Oakdale house that was built in 1940, and a beat-up $39,100 Keyes home built in 1965.
Most of the homes being purchased are much newer than that and have three or four bedrooms. After the county fixes up those homes and sells them, the money it collects from buyers will be recycled into the program so it can purchase more foreclosed homes.
For more information about participating in the Neighborhood Stabilization Program offered by Stanislaus County, Ceres, Patterson, Oakdale, Newman and Waterford, contact Roxanne Hubbs at 525-6330 or HubbsR@StanCounty.com.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or 578-2196.