Eight area communities may get foreclosure aid

Eight area communities have the chance to land some federal help in dealing with the effects of rising foreclosures.

Chelsea, Everett, Haverhill, Lynn, Peabody, Revere, Salem, and Saugus are among 39 cities and towns that would be eligible to share in $43.5 million awarded to the Commonwealth, under a state plan for disbursing the money.

The $43.5 million is part of $3.92 billion the US Department of Housing and Urban Development is awarding nationally to help cities and towns stabilize neighborhoods hard-hit by foreclosures. The funding, authorized in legislation adopted by Congress this past July, can be used to purchase, renovate, and redevelop foreclosed homes.

Under its plan, which requires HUD approval, the state identified communities most affected by foreclosures and in need of financial assistance, following criteria set by the agency.

Officials in local eligible communities say they would welcome receiving a share of the federal money, which can also be used to demolish blighted buildings; to create "land banks" for managing and disposing of vacant land; and to help low- to moderate-income homebuyers with downpayments and closing costs.

"We certainly intend to apply . . . and put an effective program together that helps our neighborhoods," said Haverhill's economic development and planning director, William E. Pillsbury Jr.

Lynn development director James Marsh said the city is seeing a high rate of foreclosures "and we are anxiously awaiting this money so we can start addressing it."

From January through the end of October, 1,151 foreclosure deeds were recorded in the eight area communities eligible for the program, an 86.5 percent increase over the 617 recorded during the same months in 2007, according to The Warren Group, a Boston-based publisher of real estate data. Among the foreclosure deeds recorded this year, 399 were in Lynn, 175 in Haverhill, 166 in Revere, 117 in Everett, 113 in Chelsea, 64 in Peabody, 63 in Salem, and 54 in Saugus.

"This is a very important new federal program that will directly address the foreclosure crisis throughout Massachusetts, especially in the hard-hit cities," said Aaron Gornstein, executive director of the nonprofit Citizens' Housing and Planning Association. "We are hopeful that the fund will be used to acquire and renovate foreclosed properties so they can be put back into productive use."

Gornstein noted that the rise in foreclosures "is one of the main reasons why there has been a drop in property values. And once property becomes foreclosed and vacant, it often will sit and could get vandalized, and tends to get more deteriorated. So you need to acquire the properties quickly and stabilize them to make them available for first-time homebuyers or for nonprofit organizations to manage. . .. That's what hopefully this funding can do."

In all, Massachusetts has been awarded $54.8 million. Of that, $11.4 million will go in direct grants to the four cities identified as the state's highest-need communities - Boston, Brockton, Springfield, and Worcester.

Under the state plan, those four cities could also apply for a combined $9.1 million. Another 10 communities, including Haverhill and Lynn, would be eligible to apply for a combined $6.8 million. The remaining funds - minus $3.4 million set aside for administration and technical help - would go to projects in some or all of those 14 communities and 25 others, including Chelsea, Everett, Peabody, Revere, Salem, and Saugus.

"This use of funds is a blend between direct aid to communities hardest hit by foreclosures and programming resources available to high priority regions in need of assistance as determined by HUD data," said Kofi Jones, spokeswoman for Daniel O'Connell, the state's housing and economic development secretary.

In this area, Chelsea, Everett, and Revere are considering filing a joint funding application to support a regional effort to address foreclosures. Though sharing resources and general goals, each city would tailor the program to meet its specific needs, according to Chelsea City Manager Jay Ash.

Ash said his city could make good use of a grant award because it already has a housing director and a larger task force dealing with foreclosures. It also works closely with nonprofits that deal directly with the issue, including one that acquires and rehabilitates vacant properties and another that counsels people at risk of foreclosure.

Revere Mayor Thomas G. Ambrosino, who recently organized a regional foreclosure avoidance workshop that drew more than 200 people, said any HUD money would be "very helpful."

"We are hoping to use it for rehabilitating properties in receivership or for acquiring foreclosed properties," he said. "So there are a lot of potential uses of this money."

Peabody's community development and planning director, Jean Delios, said the city is still evaluating how it might use any grant money. But one idea is to assist nonprofits in purchasing foreclosed properties and converting them to affordable housing.

"Even if there is just one vacant house on a street, it can potentially create a blight in a neighborhood," she said.