- The Washington Times - Thursday, March 19, 2009

LOS ANGELES (AP) - President Barack Obama on Thursday announced that California will receive $145 million to help communities hard-hit by the foreclosure crisis.

The president, speaking to about 1,000 people at a town hall-style event in downtown, said the Department of Housing and Urban Development funds will be used to purchase and rehabilitate vacant, foreclosed homes and resell them with affordable mortgages.

The president says the funds will also provide mortgage assistance and rehabilitation loans for low-income and middle-income families.

“We’ll start transforming abandoned streets lined with empty houses back into thriving neighborhoods,” the president said.

The money is part of $731 million destined for 48 states to counter the impact of high foreclosure rates and plummeting home values.

“Our goal is to help communities throughout California turn these houses into homes again,” HUD Secretary Shaun Donovan said in a statement. “California is clearly struggling with a brutal foreclosure crisis and we must make every effort to help communities prevent these foreclosed properties from becoming a source of neighborhood blight.”

The program was created as part of the Housing and Economic Recovery Act of 2008, which permits state and local governments to purchase foreclosed homes at a discount and rehabilitate or redevelop them. Additional funds will come from the massive stimulus package.

The agency plans to issue application requirements no later than May 3. HUD will review applications and make awards.

The agency said in a statement governments can use the grants to buy land or property, demolish or rehabilitate abandoned properties, and offer downpayment and closing-cost aid to low- to moderate-income buyers. They can also create “land banks,” which would temporarily manage and sell vacant land.

Meanwhile Thursday, a tracking firm said the median home price in California plunged 40 percent in February from a year ago, as low-priced foreclosure sales kept dominating the market.

The statewide median price dropped to $224,000 last month, compared to $373,000 in February of 2008, San Diego-based MDA DataQuick said. However, last month’s figure was unchanged from January, raising hopes among some that the housing market might be stabilizing.

The median home price for the state peaked at $484,000 in mid-2007.

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