GREEN TIP OF THE WEEK: READ, RESPOND, RECYCLE IN THE POST OFFICE
The U.S. Postal Service is unveiling a Post Office Box Lobby Recycling program that places secure recycling bins in Post Office lobbies. All bins are locked with a key and the opening is slim-about the width of a news magazine. Customers are encouraged to remove and open their mail (read), take whatever action is necessary (respond), and simply place the rest of their mail into the bin (recycle).
FYI: The Postal Service is the only shipping company in the country to earn Cradle to Cradle™ certification for all Priority Mail and Express Mail packages and envelopes. Find more information atusps.com/green.
As many as 300 low-and middle-income households in San Diego County will be the beneficiaries of more than $17 million in federal aid designed to clean up neighborhoods hard hit by foreclosures and to provide affordable housing opportunities.
While hardly a cure-all given the magnitude of the region's foreclosure problem, the money is expected to turn hundreds of renters into home owners as well as deeply subsidize the rents of some of the county's lowest-income households.
“Obviously, there are lots of foreclosures, and the amount of money we can put forward won't solve the issue,” said Mike Dececchi, chief of the county's community development division. “But we're excited about getting any money we can to assist folks to become first-time buyers.”
The funds coming to the county were allocated by the federal Department of Housing and Urban Development from a nearly $4 billion pot set aside for “neighborhood stabilization,” which was contained within the Housing and Economic Recovery Act signed into law last summer.
In San Diego County, the largest share of the money – $9.4 million – went to the city of San Diego, followed by the county of San Diego, which received $5.1 million. Also a recipient was the city of Chula Vista, which was awarded $2.8 million.
The allocations were calculated, in part, on the basis of foreclosure and default rates and the volume of subprime lending.
The housing agencies all have had their spending plans approved by the federal government but have not formally launched their programs. They hope to do so by the spring, when they expect the money will be released. All the funds must be committed within 18 months.
The bulk of the money coming to the county will go toward helping first-time buyers purchase repossessed homes by providing them with deferred loans that will substantially lower their monthly payments.
While each of the jurisdictions has a slightly different program, the idea behind each is to provide qualified buyers with zero-interest deferred loans that would cover up to roughly 25 percent of the cost of a home. Buyers, whose incomes cannot exceed 120 percent of median income, or $86,500 for a family of four, would have to come up with a down payment of 3 percent.
All purchases must be foreclosure homes, and in some cases, rehab work may be required, the cost of which would be rolled into the purchase price.
The San Diego Housing Commission has estimated that its home buyer money could assist 92 households, assuming the purchased homes cost no more than $230,000, including $30,000 in rehab work. However, if no renovation were needed, as many as 130 families could become buyers, as long as the purchase price did not exceed $200,000.
The plans for using the federal foreclosure money are not that much different from local governments' existing first-time buyer programs, although those typically restrict qualifying buyers to households earning no more than 80 percent of median income.
San Diego's program last year assisted 100 first-time buyers, and the funds are nearly gone, said Housing Commission CEO Richard Gentry.
Each of the three housing agencies getting funds will seek out foreclosure properties in designated census tracts where there have been high volumes of distressed properties.
Throughout the county, there are roughly 1,675 active listings of bank-owned properties, according to Brian Yui of HouseRebate.com. One of the potential hurdles the housing agencies face is a federal requirement that the bank-owned homes be sold at a discount of at least 5 percent below the appraised value. But in the aggregate, the overall discount for all homes sold must be 15 percent.
“A number of groups are advocating that the rules be changed to 5 percent,” Gentry said. “The 15 percent makes the program more difficult to operate.”
Gabe del Rio, vice president of lending and homeownership for the nonprofit Community HousingWorks, said he believes that mortgage giant Fannie Mae will offer some of its repossessed homes at a 15 percent discount.
“We're absolutely thrilled we'll have additional resources for first-time buyers,” del Rio said. “We'll work closely with all three jurisdictions and the Realtor community to make sure the program is a success.”
While 75 percent of the federal funds will be used for first-time buyer purchases, the remaining money will assist renter households who earn no more than 50 percent of the median income, or $39,500 for a four-person household.
The local housing agencies will most likely work with affordable housing developers to acquire foreclosures that can be rented out at subsidized rates. It is estimated that as many as 55 to 60 renters could be assisted.
Early on, some local housing advocates had hoped the federal money, in combination with private funds, could be used to help create a land bank that would buy properties at a discount and sell them to low-and moderate-income households.
The strategy embraced by the local jurisdictions is not one that will do much for stabilizing foreclosure-ridden neighborhoods, believes Barry Schultz, head of the San Diego Capital Collaborative, a nonprofit investment corporation that raises funds for investment in development targeting middle-income households.
“They're all taking the safe route, using existing programs in place primarily because the feds are making them get the money out quickly,” Schultz said. “Everyone is in a rush to throw a lot of money at programs without thinking how best to effectively solve the problem.”
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