The city of Carrollton today will finalize the sale of the first house sold through the Neighborhood Stabilization Program, a federal program meant to place low- to moderate-income families into renovated homes the city has purchased out of foreclosure. The city hopes that today’s sale is the first of many NSP deals it will make in a local housing market that has been rocked by unemployment and foreclosure.

The city today will celebrate the first sale made through the program, a two-story frame home in the Canterbury Villas subdivision. The program is run through the U.S. Department of Housing and Urban Development and funded through the Housing and Economic Recovery Act of 2008, which was implemented under the George W. Bush administration.

The city has purchased 15 homes across the county and has enough grant money to purchase at least twice that number before program monies are exhausted, said Charles Griffin, outgoing planning and zoning coordinator for the city who recently took the job as director of the Carrollton Housing Authority. Of the homes already purchased, the city has listed 11 of them for sale, while the other four are under contract to be purchased.

“We’re excited to see the program work,” Griffin said. “Selling a home is the last step, and we hope to have several more closings soon.”

As part of the program, the city will continue buying foreclosed homes, fixing them up and making them available to families within a set income bracket under lease-to-purchase agreements until the funding is exhausted. In exchange, those who qualify will have to attend a minimum of 12 hours of credit counseling, two hours of which must be face-to-face with a certified counselor.

To qualify, a household’s total income must be less than 120 percent of the median income for the county. A quarter of all aid administered by the city must go to families making less than $29,000 a year.

Early estimates from the Housing Authority put the number of local houses that will be purchased as part of the program at between 20 and 30, a very small percentage of the overall number of foreclosed homes in Carroll County.

In December of 2008, the Carroll County Board of Commissioners originally declined to participate in the stimulus program, citing concerns the money would come as a part of federal spending programs. Less than a month later, the city of Carrollton gave its approval for the Carrollton Housing Authority to move forward in the application just days before the deadline in mid-January, effectively negating the county’s decision.

Although the $2.6 million granted by the federal government through the program will be funneled through the city of Carrollton, housing assistance will extend to all county residents.

The city has accepted two rounds of applications for the program, with the first being in May of last year and the second about three months ago. In May of 2009, the city hosted a call-in event, giving the first 100 callers the necessary application materials for the program, established to help families move into homes that had been previously foreclosed upon. With the application materials in hand, those who met the requirements of the program were encouraged to apply for pre-approval of a home loan.

The perks of buying a home through the program are evident. Not only are NSP homes mandated to be priced 15 percent less than a recently appraised amount, buyers will also qualify for $14,000 in down payment assistance. If the buyer remains in the house for five and-a-half years and fulfills his or her obligations under the NSP, the entire amount of the down payment debt is forgiven, no questions asked.

That means that if a home in the program is appraised for $100,000, the buyer will pay a maximum of $85,000 for it and, if they remain in the house for five and a half years, the $14,000 they were given up front is theirs to keep, knocking the amount they paid on the house down to $71,000.

As it was intended, Griffin said, the program will act to ensure that neighborhoods most affected by foreclosures in recent years don’t crumble into rental slums or become completely uninhabited.

“As part of the program, we find neighborhoods where there’s a rash of foreclosed properties, isolate certain properties in those neighborhoods, renovate them and then, in fact, stabilize the neighborhood by putting families in those homes,” he said. “That’s what we’re doing here.”