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County Seeks Input On Use Of Foreclosure Rescue Fund

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By CARL ORTH

The Suncoast News

Published: November 22, 2008

NEW PORT RICHEY - Pasco County has opened the door to ideas on how to spend nearly $20 million in federal aid for a foreclosure rescue plan under consideration.

The West Pasco Board of Realtors will oblige, the group's president, Greg Armstrong, said this week. The group hopes to fill two buses to travel to Dade City for the Pasco County Commission meeting Tuesday.

Commissioners are scheduled to finalize the application for the federal money. The county must send its proposal by Dec. 1 to the U.S. Department of Housing and Urban Development.

Real estate leaders and government officials have different notions on the best uses for the money.

A few weeks ago, commissioners were told that HUD officials had indicated most of the federal aid should go toward buying foreclosed houses and fixing them up before selling them.

With a glut of houses already on the market, commissioners previously had discussed whether repairing and upgrading foreclosed houses would make sense. Ordinarily the investment could be recouped through a higher selling price, but officials note these are not ordinary times.

Armstrong insists the fastest path to recovery would be down payment assistance to put new owners into foreclosed houses. Then the new homeowners can fix up the houses with some aid. The county would help many more people that way, he said, while helping renters to purchase a home.

Deals could be set up so new owners would have a rainy day fund, Armstrong said in a phone interview this week. "The biggest chance of foreclosure is in the first year," he said.

Other restrictions could prevent "flipping" houses, Armstrong said, a practice where a person buys a second home as an investment for a quick sale at a high profit.

"That's what got us into this mess," Armstrong said about subprime loans for flipping houses.

The county commission will meet at 10 a.m. Tuesday at the historic Pasco County Courthouse, 37918 Meridian Ave., Dade City.

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