Any ideas about why, anyone?
Foreclosure help: Millions in federal money unspent in Florida
TALLAHASSEE, Fla. – March 31, 2010 – Florida and several local governments within Central Florida are way behind in spending $91 million statewide in federal funds aimed at stabilizing neighborhoods shaken by foreclosures.
Florida trails all but three other states in putting the foreclosure-relief dollars to work and could lose any funds not committed to projects by the end of September, according to a U.S. Department of Housing and Urban Development report this month on the Neighborhood Stabilization Program.
“It’s obvious that the state … was unprepared to handle processing of those kind of grant resources and has dropped the ball,” said U.S. Rep. Adam Putnam, a Republican who represents parts of Polk, Osceola and Hillsborough counties.
Though HUD officials say most local governments in the country have committed about one-third of their funds by now, the cities of Deltona and Lakeland and Brevard and Volusia counties have fallen behind. Deltona, for instance, still has more than $6 million of its $6.6 million allocation.
“The challenges have been learning the … system, finding the [housing] units, negotiating with the lending institutions,” said Lee Lopez, a spokesman for Deltona city government.
Apopka, meanwhile, was one of only two of the hardest-hit cities in the state that opted not to take the federal money. City officials there did not return phone calls seeking comment, but state officials said the money Apopka would have received, had it applied for the funds, is going instead to Miami Beach, which has already exhausted its original funding.
Local and state problems in spending the foreclosure-relief dollars have come to light at a time when Florida is slated to get its largest housing-rescue package yet – $418 million as part of the federal government’s Hardest-Hit Fund. Next week in Orlando, the Florida Housing Finance Corp. will accept public comments about how to distribute that windfall.
The coming pot of money – enough to give $10 to each owner-occupied house in the state – will be distributed by Florida Housing Finance, an agency that has been unable to spend most of a $30 million pot that the state Legislature approved last year to boost homeownership across Florida.
By mid-March, only about $4 million of that money had gone to homebuyers, even though the program effectively ends April 30. The agency said it provided the money to local governments, but those agencies then had trouble finding takers. The program fronts as much as $8,000 for downpayments to qualified homebuyers who are supposed to repay the money once they get a federal homebuying tax credit for that amount. The unused millions are now likely to be rolled into other, existing housing programs.
Cecka Green, spokesman for Florida Housing Finance, said it may be difficult for the public to imagine how so much money can be allocated to a state with such great needs, only for much of the money to go unspent. But it takes time to ensure that accountability measures are in place so that such money is spent wisely, she said. SOUNDS LIKE POLITICAL WRANGLING GOING ON-TED
Like those downpayment funds, the federal Neighborhood Stabilization funds have been slow to make it to people’s doorsteps in Florida. The money is supposed to filter down from the state Department of Community Affairs to local governments and other funding groups, which then use the money to buy, rehabilitate and resell foreclosed homes in low-income areas.
If the state “doesn’t pull it together pretty quickly, they’re walking away from a lot of opportunities to help Florida homeowners who are underwater on their mortgages,” said Putnam, who serves on the U.S. House subcommittee for Housing and Community Opportunity.
State Rep. Darren Soto, D-Orlando, said he may push for an extension of the deadlines rather than risk Florida losing the money.
“Obviously a lot of us are disappointed with how slowly these monies are being spent, and a lot more is coming online,” said Soto, an Orlando lawyer. “I understand we need to be thoughtful in how we spend this money, but we can’t be thoughtful forever.”
In response to criticisms of the Neighborhood Stabilization program, the Department of Community Affairs recently hired three rapid-response technical-assistance firms to help local governments distribute the funds. It made other personnel changes to expedite the program and changed some of its requirements for cities and counties getting the funds.
“When these programs came out, everything was about fraud and oversight, and we had high levels of oversight looking for credibility,” said Janice Browning, director of housing for the Department of Community Affairs. “Did we go overboard? Maybe. But it seemed to be the right thing at the time.”
The state is now giving local governments more flexibility to look at how they spend the money, though “we will check on them” as the funds are spent, Browning added.
Putnam said he is concerned that agencies and governments may act rashly to spend the money before the September deadline.
“Our concern is that, yet again, they will be ill-prepared to handle that tranche of money in an efficient way,” Putnam said. “And, perhaps even worse, in an attempt to make sure it doesn’t get redistributed to another state, they will lower standards and misspend it.”
Copyright © 2010 The Orlando Sentinel, Fla., Mary Shanklin. Distributed by McClatchy-Tribune Information Services.
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