Commissioners say hands tied by federal grant’s rules

A hefty federal grant will help fill vacated houses cropping up like desert weeds in Clark County, an area hit hard by foreclosures.

But some commissioners grumbled Tuesday as they reviewed the guidelines for the $22.8 million grant and said they felt handcuffed by rules that would let the county chip in money only for houses already in foreclosure.

To stem the foreclosure tide, the county should be allowed to buy from people on the brink of losing their homes, commissioners argued.

"It's great to have some money, but it's very unfortunate, the constraints," Commissioner Susan Brager lamented.

As fast as the county takes over one foreclosed home, another financially struggling owner could fall into trouble, she said.

Data compiled by the county show that more than 12,100 homes have been foreclosed.

The grant money comes from the Department of Housing and Urban Development. It's part of the $3.92 billion in emergency funding that President Bush approved in July for the Neighborhood Stabilization Program.

The program's main purpose is to enable state and local governments to buy empty houses that can blight neighborhoods.

Nevada received a total of $72 million. Of that, $24.3 million was earmarked for the state; $22.8 million for the county; $14.8 million for Las Vegas; $6.8 million for North Las Vegas; and $3.2 million for Henderson.

Municipalities must submit a plan by Dec. 1 to HUD outlining how they will use the money. The agency has 45 days to review the plans, suggest changes if needed and approve the final draft, said Michael Pawlak, a management analyst in the county's finance department.

After that, the money should become available, Pawlak said. HUD will reimburse the county for each expenditure.

The county must pay at least 15 percent below the home's appraised market value, Pawlak said. He said the county can rent homes, demolish them or renovate and sell them.

Buyers who receive financial aid through the county cannot earn more than 120 percent of the area's median income, $53,700 for one person and $76,700 for a four-person household, Pawlak said.

Commissioner Rory Reid said he is trying to get the local governments, and eventually the state, to coordinate their planning to avoid duplication.

His father, Sen. Harry Reid, D-Nev., today will tour a hard-hit northwest neighborhood that the grant could benefit.

Commissioner Lawrence Weekly said the money should be funneled to areas suffering the most in the mortgage crisis.

"I just hope we are able to spread the wealth," Weekly said.

HUD guidelines call for governments to target the areas with the greatest concentration of vacant homes.

"If we can get people living in these properties and maintaining them ... we hope it can help the neighborhoods," Pawlak said.

Contact reporter Scott Wyland at swyland@reviewjournal.com or 702-455-4519.