Board of Supervisors Announces New Initiative to Address Home Foreclosures in Fairfax County
June 30, 2008
- Board of Supervisors approves a three-pronged initiative to address the foreclosure crisis in Fairfax County.
- The initiative includes assistance to homeowners in distress, the Silver Lining Initiative and neighborhood preservation efforts.
The county will provide counseling to homeowners at risk of
foreclosure, buy foreclosed homes and provide low-cost loans to
homeowners to maintain their property.
The Fairfax County Board of Supervisors has authorized a new initiative to address the foreclosures within the county. It is anticipated that the total number of foreclosures in the county in 2008 will far exceed the number of foreclosures in the county in 2007.
The total number of foreclosures in 2007 was 4,527. In the first quarter of 2008, the number of foreclosures was 3,518. The initiative is a three-pronged approach designed to address the current foreclosure problem and help stabilize impacted neighborhoods while increasing the opportunities for additional workforce housing. These approaches include: Assistance to Homeowners in Distress, the Silver Lining Initiative and Neighborhood Preservation Efforts.
"This new initiative, funded through existing resources, will help restore stability for residents and neighborhoods affected by the foreclosure crisis," said Board of Supervisors Chairman Gerald E. Connolly. "We will offer assistance to those at risk of losing their houses, assist first-time buyers purchase already vacant houses, and in some cases the county or its nonprofit partners will purchase a small number of houses to help stabilize distressed neighborhoods."
Assistance to Homeowners in Distress
Foreclosure specialists from the Fairfax County Department of Housing and Community Development (HCD) and other county agencies and nonprofits will coordinate efforts with the Virginia Housing Development Authority (VHDA) to counsel households at risk of foreclosure in Fairfax County. In addition, VHDA is training volunteers as certified foreclosure counselors to assist with the counseling of at-risk households. The focus of the counseling is to connect homeowners with their lenders or other resources, with the ultimate goal of a loan work out. HCD also will perform community outreach to include attorneys who could provide pro bono services to at-risk households.
Silver Lining Initiative
Through a federally funded Home Equity Loan Program (HELP) shared equity loan, HCD will assist first-time homebuyers to purchase a foreclosed home. The purchase price of the foreclosed home can not exceed $385,000, and homes are limited to townhouses and single-family homes. Low-cost first mortgages through the VHDA’s SPARC program will be used for qualifying households. It is anticipated that up to 100 homes will be purchased through this initiative by first-time homebuyers. If a foreclosed home requires repairs or improvements the Home Improvement Loan Program (HILP), offered by the Fairfax County’s Department of Housing and Community Development, can be used to make needed repairs. Upon the sale or transfer of the property, the county will be repaid and share in the appreciation.
Neighborhood Preservation Efforts
To assist in maintaining home values in communities with foreclosed properties, the county will use a variety of tools:
Direct Strategic Purchase: The Fairfax County Redevelopment and
Housing Authority (FCRHA) will purchase up to 10 foreclosed homes
identified as abandoned, deteriorated or a destabilizing force on the
neighborhood. The home will be rehabilitated and resold to first-time
homebuyers or a nonprofit organization. Funding of up to $2.95 million
for the purchase and rehabilitation of these 10 units will come from
the FCRHA's taxable line of credit and will be repaid once the property
has been sold to a first-time homebuyer.
- Neighborhood Appearance and Safety: By using the existing HILP program for low-cost loans to current homeowners, the county will assist homeowners in maintaining and preserving the appearance and safety of their neighborhoods.
- Community Housing Development Organizations (CHDO) Set-Aside: Approximately $400,000 in federal funds will be earmarkedinFiscal Year 2009 as CHDO HOME set-aside funds for nonprofit organizations that are certified CHDOs to buy foreclosed homes and rehabilitate them when necessary. These homes will then either be sold to qualified first-time homebuyers or the nonprofits will use the homes for rental purposes for qualified tenants.
Funding for the initiative will total $6.5 million, including $1.8 million from the One Penny Housing Fund for Fiscal Year 2009; a proposed $4.5 million from the One Penny Housing Fund for Fiscal Year 2010, which will be considered in the budget approval cycle for that fiscal year; $2.075 million in existing federal HOME funds; and $2.95 million in existing FCRHA line of credit funds. In addition, the program is designed to leverage potential federal funding should that become available.
Fairfax County Office of Public Affairs
12000 Government Center Parkway, Suite 551
Fairfax, VA 22035-0065
Contact: Merni Fitzgerald, Director of Public Affairs
703-324-3187, TTY 711, Fax 703-324-2010
Media Pager: 703-324-NEWS (6397)
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