State

$40M eyed for vacant homes

Saying they've been "drastically affected by home foreclosures," Stanislaus County and five cities are preparing to ask for $40 million in federal stimulus money to resurrect vacant homes.

"The foreclosure rate for Stanislaus County does not seem to be lessening at a significant rate," reads the application, to be reviewed today by county leaders. Unemployment in April stood at 32.1 percent in Empire and 27 percent in Keyes, while state and national jobless rates were 10.9 percent and 8.6 percent, respectively.

About $10 million would rescue 180 bank-owned, abandoned homes in those towns as well as in Salida, Ceres, Oakdale, Waterford, Patterson, Newman and unincorporated pockets of Modesto, according to a report. The rest of the money would make them energy-efficient through solar panels and new appliances, and would provide down payment help to first-time home buyers and demolish other homes that are beyond hope.

The partners previously received a $1 million emergency shelter grant and $9.7 million in neighborhood stabilization money. That money was distributed based on formulas, but the $40 million application would compete with others around the country for $1.92 billion in federal grants.

Without banding together, the county and cities individually would not meet certain requirements, said Aaron Farnon, who oversees the county's housing programs. For example, applicants must prove worthiness by having completed at least 75 home renovations in the past two years.

Agencies with larger populations, such as Modesto and Turlock, are "federal entitlement communities" and would apply and compete on their own.

If successful, the partners would be notified by Dec. 1. They would spend the money within two years.

The county and cities would rely on the Stanislaus County Housing Authority to negotiate with lenders and real estate professionals.

The application blames the county's foreclosure crisis on subprime loans and other questionable financing made available for pricey new houses built before the recession.

Today's hearing kicks off a public comment period that ends July 10.

For more information, call Stanislaus County Planning and Community Development at 525-6330.

Today's meeting of the Board of Supervisors is at 9 a.m. in the basement chamber of Tenth Street Place, 1010 10th St., Modesto.

Bee staff writer Garth Stapley can be reached at gstapley@modbee.com or 578-2390.

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