City, County may buy foreclosed homes

AUSTIN (KXAN) - No longer are investors solely looking great foreclosure deals in the down economy, the City of Austin and Travis County are as well. Both the city and county are currently making plans apply for money to buy up foreclosed homes that are sitting vacant and creating eyesores in neighborhoods in Central Texas.

Both governmental bodies are in discussions to apply for funding from the Housing and Urban Development's Neighborhood Stabilization program to purchase the properties and redevelop them for affordable housing. The nationwide funding program is designed for communities as an emergency act to prevent blight in neighborhoods.

Texas is eligible for more than $178 million in the program, while Travis County is eligible for more than $2 million to buy up homes and help low-income homeowners get into the otherwise vacant homes.

"You're going to have a lot of problems keeping up a nice neighborhood when you've got a lot of vacant homes," said Harvey Davis, manager of the Travis County Housing Finance Corporation. "The idea is that this money would be used to try and stabilize neighborhoods."

All of the money spent would go toward helping families at or below 120 percent of the area's median income. That means a family of four making less than $85,300 would be eligible to purchase a foreclosed home under the program, at a possible reduced rate, with other low-income loan opportunities from Travis County and the City of Austin .

Both the City of Austin and Travis County are expected to apply for the funding by the end of Febrary.  If approved for funding, the governments would have to spend the money by July 2010.