Thursday, March 4, 2010
7 News Investigations: Use It or Lose It
Time is running out on a government program designed to get families into foreclosed homes. The plan giving local governments money to buy and resell homes rolled into gear last year, but with six months left to spend the money, an exclusive 7 News investigation finds officials must use the money or lose it.
WSVN -- Yolanda Dukes wants to buy a house. Problem is she is a single mom with two kids and doesn't have a lot of money.
Yolanda Dukes: "First of all, can I purchase a home being a single parent?"
Until now, probably not then, she heard about a new federal program that buys foreclosed homes in Dade and Broward and sells them at a low cost to people like her.
Yolanda Dukes: "I went down there to inquire about it."
She inquired about getting into a home, but like many South Floridians who heard the promises, she's waiting and waiting.
Armando Fana, HUD Miami Office Director: "There are pockets of success, there are pockets of failure or non activity."
Armando Fana runs the Miami office for the U.S. Department of Housing and Urban Development or HUD.
Armando Fana: "Certainly it got off to a fairly slow start as government programs tend to do."
Slow indeed, nearly a year ago HUD gave cities and counties in South Florida 157 million dollars to buy foreclosed properties, fix them up and sell them to low to moderate income families, but so far the local government agencies have only spent around $15 million.
Janette Smith, Homestead Finance Director: "It's been a lot slower than I thought it would be."
The spending has been very slow in Homestead, where the foreclosure rate is so high that the federal government gave the city nearly $2.9 million dollars to buy the empty properties. The city spent $235,000 to set up the program and has only bought five houses.
Janette Smith: "It's a little bit frustrating. I really expected the program to be much further a long than we are right now."
And Homestead is not the only city that's having trouble spending money. According to HUD's records, Miami-Dade County got $62 million but has only spent 2.3 million. Broward county got about $17 million but has only spent 2.7 million.
Armando Fana: "You have cities like the city of Plantation that's obligated 100% of their funding, and then you have others that are under that 30% threshold and those are the ones we're worried about."
The reason for the worry, if the South Florida cities and counties don't spend the money this year they lose it and it goes back to the feds. So what is stopping them from buying empty homes and cleaning up neighborhoods? The people heading up the programs say it's because the federal rules are too strict.
Local governments can only buy homes that have already been foreclosed on and they have to sell it at a price under the appraised value. Finding houses like that is not easy, so the money just sits there.
Steve Ellis, Taxpayers For Common Sense: "We're throwing money at problems that we're not necessarily even solving."
Steve Ellis of Taxpayers for Common Sense says this is a classic example of the feds throwing cash at cities and counties that have no idea how to spend the money.
Steve Ellis: "And it's a challenge for these communities to ramp up this program that they now know they have a deadline. They have to spend the money, and in many cases it seems like they haven't even got to a point of identifying the foreclosed properties, much less purchasing them."
But, some cities have figured it out and have found ways to get people into homes.
Jennifer Morello: "It's great having my own home."
Tamarac is being applauded by HUD for being able to spend their money. They found this home for Jennifer, fixed it up and sold it to her .
Jennifer Morello: "It's my first home, a little hectic, still a lot of construction going on, but I'm grateful I have my own home, it's just been wonderful."
And Yolanda has reason to hope now too. North Miami recently found a foreclosed property and is fixing it up for her.
Yolanda Dukes: "It's exciting. I'm very happy about it, but you have to be patient because everything takes time, it doesn't work overnight."
But, will other families be so lucky? If South Florida agencies don't figure it out quickly empty homes sitting in foreclosure will continue to ruin neighborhoods, while the cash to buy them flows back to Washington, something HUD officials hope to avoid.
Armando Fana: "I don't want any of this funding to go back to Washington. It needs to stay here in South Florida where it's desperately needed and we're going to make sure that happens."
HUD now plans to step up and help local governments run the programs to make sure they use the money not lose it.