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Pasco OKs Foreclosure Rescue Aid Application

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By Carl  Orth | The Suncoast News

Published: November 25, 2008

DADE CITY - Facing a Dec. 1 application deadline, the Pasco County Commission today approved a foreclosure rescue plan.

The decision could make the county eligible to receive nearly $19.5 million in federal aid, but there was some criticism from the realty industry about how the money might be spent.

Area real estate industry leaders insisted that more money needs to go directly to potential buyers of foreclosed properties through down payment assistance. The buyers then could fix the houses with some of the aid money.

Several dozen members of West Pasco Board of Realtors went by bus to today's County Commission meeting. Board President Greg Armstrong and President-Elect Victoria Barley led the delegation.

The Pasco plan, however, would apply the largest amount of the money from the U.S. Department of Housing and Urban Development, nearly $9 million, toward buying foreclosed or abandoned houses, repairing them and then putting them up for sale.

The county would not directly buy the properties but would funnel the money through "nonprofit partner agencies," Pasco Development Manager George Romagnoli explained. He drafted the plan the county will submit to HUD for approval.

Another $6.5 million would go toward the Homebuyer Assistance Program, which provides direct down payment help. The Realtors group recommended the assistance program get at least $10 million.

Commissioners seemed to be reassured about the plan after Romagnoli said the county would have the discretion to later shift around as much as $2 million of the HUD funds, depending on market conditions. Right now, the county would have to go through a complicated, six-week process to get federal approval for any changes in spending the federal funds totaling $100,000 or more.

Armstrong believes thousands of residents might benefit through more down payment assistance, while the county plan might only allow a few hundred houses to be refurbished.

Armstrong challenged the notion the money to repair foreclosed houses could be recouped via a higher selling price. A $60,000 house might get $30,000 in improvements under examples in the county plan.

With a glut of some 5,700 houses for sale in the portion of Pasco County west of the Suncoast Parkway, Armstrong said, "Time truly is of the essence" in dealing with the foreclosure problem.

Commissioner Ted Schrader, however, worried the county could forfeit the $19.5 million in federal aid if commissioners didn't approve Romagnoli's plan today and instead opted to rewrite it to take the real estate professionals' concerns into account.

HUD officials will review the county outline. If they approve the Pasco plan, they will send a grant agreement to the county by February.

Carl Orth can be reached at 727-815-1068 or corth@suncoastnews.com.

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