Brown Helped Ensure Ohio Received $570 Million in Hardest Hit Funds in 2010
WASHINGTON, D.C. – August 5, 2013 – (RealEstateRama) — Today, U.S. Sen. Sherrod Brown (D-OH) urged the U.S. Department of the Treasury to approve the Ohio Housing Finance Agency’s proposal to use $60 million of the state’s nearly $375 million remaining Hardest Hit Funds (HHF) to demolish vacant and abandoned properties. Brown, a member of the Senate Committee on Banking, Housing, and Urban Affairs, helped ensure Ohio received $570 million in HHF in 2010.
“Ohio communities need more resources to address the scourge of blighted properties caused by the housing crisis,” Brown said. “This proposal would balance the important needs of housing counseling and foreclosure prevention resources with the need to demolish vacant and abandoned homes. It is in the best interests of Ohio’s homeowners, municipalities, housing counselors, and businesses.”
In his letter to Treasury Secretary Jacob Lew, Brown explained that Ohio’s foreclosure problem didn’t begin with the market downturn in 2008, but had increased steadily in the 14 years prior due to an eroding manufacturing base and predatory lending that took its toll on Ohio’s homeowners. While foreclosures have fallen from more than 89,000 in 2009 to more than 70,000 in 2012, there are still 100,000 blighted properties that continue to threaten Ohio’s neighborhoods at the cost of local governments and entities. According to the Government Accountability Office (GAO), vacant properties reduce the value of a nearby home by 0.7 to 10.0 percent.
HHF has provided OHFA with more than $570 million in funds that can be used in a flexible manner to address Ohio’s local housing issues. Almost $200 million has been spent on a variety of programs that help Ohioans stay in their homes, including direct assistance to borrowers and help for local housing counselors to assist homeowners. Of the more than 10,000 Ohioans who have received assistance to date, the overwhelming majority have been able to remain in their homes. Less than one-half of one percent of participants has lost their homes through a sheriff’s sale.
In June, Michigan was the first state to receive approval to dedicate a portion of its HHF to demolish vacant and abandoned properties. In June, Brown urged Governor Kasich to balance the important needs of housing counseling and foreclosure prevention resources with the need to demolish vacant and abandoned homes that have blighted communities. In 2012, Brown wrote to the Treasury Department and the Department of Housing and Urban Development (HUD) urging them to allow Ohio flexibility for demolition.
As a member of the Senate Committee on Banking, Housing, and Urban Affairs, Brown is a longtime champion of foreclosure mitigation efforts. When the Senate passed a housing bill in 2008, Brown successfully passed an amendment that provided an additional $80 million in mortgage counseling funds. When Ohio was not among the initial five states included in the Help for the Hardest-Hit Housing Markets (4HM) program when it was launched in February 2010, Brown made direct appeals to President Obama and then Treasury Secretary Geithner to dedicate additional funds for this program. At the behest of Brown, the 4HM program, which uses leftover funds from the Troubled Asset Relief Program (TARP) passed in 2008, was expanded in March 2010 to cover Ohio.
Despite the success of HHF in Ohio, many communities have expressed the need for flexibility in how the funds are spent, including an allowance for demolition of vacant and abandoned homes. In 2009 and 2010, Brown helped secure more than $484 million in demolition funding through the three rounds of the Neighborhood Stabilization Program (NSP).
Brown’s letter to the Treasury Department can be read in its entirety HERE.