EBENSBURG — The federal government’s first of several programs to battle the national housing crisis is coming to Pennsylvania, especially to counties such as Cambria, where more than one-half of the boroughs might be eligible.
HUD, a federal housing agency, is putting almost $60 million on the table for the state as a whole, and cities such as Philadelphia and Pittsburgh are getting separate appropriations as well.
The program is aimed at redeveloping foreclosed properties that might otherwise be abandoned, said Larry Custer, executive director of the Cambria County Redevelopment Authority.
Much of Cambria County will be eligible, especially Johnstown, he said.
Preliminary assessments are that about 33 county municipalities, which are older and could be at risk of blight, could be eligible, including Franklin and East Conemaugh boroughs near Johnstown, and communities in the northern part of the county, such as Nanty Glo, Ebensburg, Gallitzin, Cresson and Portage, he said.
Funds only can be used for individuals and families whose income does not exceed 120 percent of the area median income, Custer said. For a single person in Cambria County, that would be earnings of about $40,000 a year.
Also, 25 percent of the funds must be used to benefit those whose incomes are less than 50 percent of the area median income.
Eligible municipalities will be those with the highest percentage of home foreclosures and homes financed by a subprime-rate mortgage.
Custer outlined the new HUD program at a redevelopment authority meeting Thursday, saying it will benefit blighted neighborhoods, but also will be challenging to administer.
The HUD program is not the bailout program that the federal government is planning for homeowners facing foreclosure. Instead, a building must already have been foreclosed on and have been vacant for 90 days, he said.
While the program could be a boon to the agency, which already redevelops blighted properties, it will be a challenge to work out the logistics and meet the deadlines HUD has imposed, Custer said.
“There’s $60 million on the table, but first the state must prepare an action plan, and individual municipalities must apply. Then, we will have only
18 months to spend the money, and that will be difficult because everything must have a separate contract,” Custer said.
“Also, we don’t know how many foreclosures the county will be facing. We know there have been about 65 in the past six months, but it will take a lot of research on our part,” he said.
Custer has been asked to be one of several officials to help the state work out the details as the new program takes shape.
“The goal will be to buy, rehabilitate and then sell these foreclosed properties,” he said. “That’s what we want to see, but it will mean working out the logistics before it can happen.”
Custer said he will update board members at the authority’s next meeting on Nov. 25.
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