San Jose Granted $5.6 Million From Foreclosure Rescue Plan Allotment

September 30th, 2008 | Tags: Foreclosure Crisis

San Jose has received a grant of $5.6 million from the allotment made by the feds towards foreclosure rescue plans. It will help in purchasing and refurbishing foreclosed houses. This amount is a slice of the $3.92 billion that is to be distributed among all the states as declared by Steve Preston the secretary of HUD.

California will benefit from a grant of $529 million. Senator Barbara Boxer and Dianne Feinstein are not happy with the amount and thinks that California should get more. The Senators expressed their displeasure in a letter addressed to Preston, “This makes no sense and is totally unacceptable.” The two senators argued that California would be getting less amount than even Florida although the state had reported 274,013 more foreclosure postings already this year. Approximately California will be getting 13% of the grant although it is accountable for over 25% of all the foreclosures across the nation. The senators insisted that it is beyond their understanding how California with double the amount of foreclosures than Florida (561,223 and 287,210 respectively) should be given less. There are entire neighbourhoods in cities like Stockton that are decimated by the foreclosure crisis. It is posing a grave threat to the economy of the state.

But a HUD spokesperson parried the issue by saying that their approach has been “fair and thoughtful” and they are doing essentially what the Congress has told them to do.

San Jose has been relatively in a better position. The amount allocated to it “will definitely help to begin to address foreclosure issue” said Jacky Morales-Ferrand of San Jose Department of Housing. It will of course not help the present owner of the house who is facing foreclosure but it will reach out to a future where vacant foreclosed houses will not pose a threat to the community. Moreover it will make available plenty of affordable housing for the weaker sections of the community. Some will be helped to make down payments. It is calculated that 40 potential nest builders will get help.

To avail of the aid there are certain preconditions as regards income. The income limit for a family having four members is set at $126,000 and for an individual at $88,600. The amount for the down payment would be advanced as loan. The repair and refurbishing would focus on safety and health issues.