Grant may help homeowners
Published 7:52 am Saturday, February 14, 2009
FRANKLIN—If you were to take a drive through the streets of Franklin, you would see a “For Sale” or “Auction” sign in at least one front yard on almost every street within the city limits.
According to Sheryl Frazier, the executive director of Franklin Housing and Redevelopment Authority, more homes are sitting open in Franklin than people realize.
“On our last count, we estimated at least 139 homes within the city were either for sale, foreclosed or currently vacant,” she said.
Frazier said for a city the size of Franklin, which has about 8,000 residents, those numbers are “staggering.”
“People are losing their homes across the board in all socioeconomic brackets,” she said. “We definitely have a problem that could evolve into a housing crisis if we don’t do something about it soon.”
According to the latest information from the Department of Housing and Urban Development, the current foreclosure rate in the city is 7.3 percent, making it the third highest in the state of Virginia. Only Petersburg and Lee County have higher foreclosure rates.
HUD also alerted local officials that 46.8 percent of all mortgages in the city are considered sub-prime. The agency predicts that because of this statistic, the foreclosure rate may rise to an estimated 11.5 percent in the next 18 months.
The city, along with the Housing Authority and the Southeastern Tidewater Opportunity Project, have taken what they believe is a proactive step to help ease the pain of foreclosures, vacant homes and unsold residential property in Franklin.
On Tuesday, the city filed for a $25,000 planning grant with the Virginia Department of Housing that would assist the city in its pursuit of a Virginia Neighborhood Stabilization Project Grant.
NSP grants were created as a part of the Housing and Economic Recovery Act of 2008 to assist with the redevelopment of areas that have a high rate of abandoned and foreclosed homes.
Amanda Jarratt, Franklin’s city planner, said NSP grants will help the city buy abandoned and foreclosed homes that have been sitting vacant for at least 90 days.
“NSP funds can only be used to purchase and rehab any homes we buy,” she said.
Jarratt added that the grant’s criteria “states that the city can only purchase homes for 15 percent below their appraised value, in order to keep the home affordable for residents who would like to purchase them.”
According to Jarratt, the homes will be available to anyone who qualifies for a conventional mortgage, has participated in home ownership training with either the Housing Authority or STOP, and earns a low- to middle-class income.
The latest HUD data considers middle-class income in Franklin to be $62,400 for a family of four.
The city would not make any profit off the sale of the homes, Jarratt said.
Frazier said if NSP funds were awarded, it would be good news for the city. She said the grant might be a way to help those who lost their homes to foreclosure to move back into their original residence.
“People are just packing up, abandoning their homes and leaving Franklin,” Frazier said. “It’s a trend I hate to see. If they knew there was a way to possibly get their homes back, they might not leave.”
She added “when homes sit vacant for long periods of time, there is a significant increase for the potential of blight and criminal activity. These funds may help stop that trend.”
Jarratt said, “Until we saw HUD’s numbers, I don’t think any of us realized how serious the situation was. This grant will help the community remain viable.”
A recent report by Realty Trac found that across the state of Virginia, the foreclosure rate in January was one out of every 610 homes, up by 4.2 percent over last year. Nationwide, the current number of homes in default is 1 out of every 466 homes.