2024-06-24 7:50 PM

A Penny for Your Thoughts: News from Greater Falls Church

Foreclosure issues continue to dominate the economic forecasts for our region and our nation. The Washington region, which came to the foreclosure market more slowly than other regions, suddenly is a “hot spot” for analysts. A recent survey of bank executives about key issues revealed that a declining economy, faltering credit markets, stiff competition from other financial institutions, and an uncertain political year are factors contributing to their general discomfort about the financial future. Many of those surveyed believe the financial crisis is not over, that it will take another six to 12 months minimum before an upswing occurs.

There are many opinions about foreclosures, why they happen, what poor decisions were made by some homeowners, and the role that fraud plays in the current crisis, but the growing problem has promoted many local governments, including Fairfax County, to seek ways to assist both homeowners and potential homebuyers. The Board recently took action to expand the housing assistance available to county residents who qualify. First, the Board continued a Virginia-sponsored initiative to counsel households at risk of foreclosure. The focus of the counseling will be to connect homeowners with their lenders or other resources through information and referral. A recent poll indicated that more than half of foreclosed homeowners did not even speak with their lenders about their problem!

A second program would help first-time homebuyers purchase a foreclosed home through a Home Equity Loan Program (HELP) second trust. A HELP program for first-time buyers already exists; now it can apply to foreclosed homes. The top limit for purchase price is $385,000; the home must be available for purchase following the fore-closure proceedings, clear title must be obtained, and the property must be free of zoning or building code violations. The county has strict underwriting criteria for first-time home buyers who qualify for the program. One Supervisor did advocate using county funds to keep people in their foreclosed homes (thereby subsidizing bad debts or poor investments), but the Board did not support that approach.

The Board also authorized direct purchase of up to 10 foreclosed properties across the county, which may be abandoned, deteriorated, or otherwise destabilizing to neighborhoods. No specific homes have been identified; properties would be rehabilitated and sold to first-time homebuyers or non-profit organizations. The overall goal of these expanded programs is to serve up to 100 families countywide. For perspective, there are approximately 288,000 single family and townhouse units in Fairfax County; 2000 properties were in foreclosure in March 2008.

Funding for the programs includes reallocation of modest leftover funds from other housing programs; existing project funds for affordable/workforce housing; and use of the taxable line of credit available to the Redevelopment and Housing Authority to purchase up to 10 foreclosed homes. Upon sale of those foreclosed homes to buyers, the line of credit would be repaid immediately. More information about housing assistance programs in Fairfax County is available on-line at www.fairfaxcounty.gov.


On Key

Stories that may interest you