Newton County will receive more than $2 million to buy and rehabilitate residential foreclosed and bank-owned properties. The county is receiving the money through the Neighborhood Stabilization Program, a federal grant program designed to alleviate an ailing housing market in communities like Newton County, which have high foreclosure rates and a high number of houses with subprime mortgages.

The county received $1.74 million and the city of Covington received $428,000. The county submitted multiple projects for the grant and is still deciding which one, or ones, it will pursue, while the city received approval for its lone project.

Mayor Kim Carter said the city wants to purchase property in smaller, densely developed areas that have a high number of foreclosures. By buying several properties in a concentrated area, the city hopes to stabilize an entire neighborhood, not just rehabilitate individual, isolated homes.

The city is planning to purchase properties in Jefferson Village, located off Puckett Street in southern Covington, City Senior Planner Michelle Larsen said. She said Jefferson Village is a traditional, tightly packed neighborhood, with only 58 lots, as opposed to a larger subdivision. Ten out of the 58 lots are foreclosed or bank-owned, so if the city purchased some or all of these properties, it could affect significant change, Larsen said.

Carter said she hopes the grant money will help put people back into homes and revitalize the neighborhood.

"We would hope to promote affordable home ownership," she said. "To put more homes on the tax rolls and to make it a desirable place for folks to live. To provide good affordable houses in a stable neighborhood."

Larson said the city will work with the North Carolina based non-profit group Builders of Hope, because the group has experience buying, rehabilitating and selling homes. Builders of Hope doesn’t just renovate homes; it prepares prospective homebuyers for the responsibility of owing a home. The group also helps neighborhoods form associations to strengthen the relationships between neighbors and to create a situation where residents look out for their community, Larsen said. Finally, the group often hires local workers, including homeless shelter residents and troubled youths, and teaches them construction skills. Builders of Hope also will be in charge of following all of the restrictions and stipulations associated with the grant money, taking the burden off of the city.

Larsen said the city expects to purchase properties in two to three months.

Carter said she is excited about how the project fits into the city’s overall housing initiative and urban redevelopment plan, which the city is in the process of completing.

"We have this big housing initiative going on," Carter said. "There is going to be a ton of renovation; 25 percent of (city residents) are at the poverty level or below. We’re looking to revitalize the city and have a safe affordable place for citizens to live. We want to give people a hand so they can stand up."

County Chairman Kathy Morgan said the Board of Commissioners will decide how to spend the county’s money at the April 7 BOC meeting. Newton County submitted three different projects for grant consideration:

- buying vacant foreclosed property and building a public park in the Salem Road area

- buying vacant foreclosed lots and building homes on them in Porterdale

- buying existing foreclosed houses and renovating them in Covington

County Zoning Administrator Scott Sirotkin said each project was expected to cost the full $1.74 million, but depending on the final costs, the county may be able to fund partially the other projects. Morgan said the commissioners will decide whether to accept the grant money and will prioritize the order of importance of the projects on April 7. She said it’s possible that the county will choose one project only to discover that the owners are unwilling to sell their property or that the project will exceed budget. In this case, the county will move on to the next project.

Sirotkin said specific properties are not being publicly released because land owners may be inclined to drive up the price. That is especially important in the case of this money, because the grant stipulates that properties much be purchased for an average price of 15 percent below appraised value.

Sirotkin said he didn’t know when any properties would be purchased because the county is still learning about the details of the program. A workshop for grant recipients is scheduled for April. Larsen said one known timetable is that the county and city must have spent their money within 18 months. The work does not have to be completed, but the properties must be purchased and the construction companies, in the city’s case Builders of Hope, must be contracted.

The use of the money has several other stipulations. The money must be used to benefit low-to-moderate-income families, either through direct sale of a house or through the proper placement of a new park. In Newton County, moderate-income families are defined as those families with incomes equal to or less than $43,689.60. In addition, 25 percent of the money must be used to help those with incomes equal to or less than $18,204.

The city and county are not able to profit from the sale of rehabilitated houses, but they are able to recoup all of their costs, which, in theory, would allow this grant money to be used over and over again without end.

Newton County was in particular need of this grant as the county had an estimated 823 foreclosed properties in 2008, Sirotkin said. In addition, 28 percent of the county’s mortgages are subprime, the second highest county rate in Georgia.

Both the city and county are planning to apply for future Neighborhood Stabilization Program money, which would be provided through February’s federal stimulus package.