The sign outside a foreclosed home. These signs have become familiar sights in Santa Ana in recent years. (Photo credit:

A third round of the Neighborhood Stabilization Program could funnel $2.4 million to Orange County and Santa Ana to continue the effort to revive neighborhoods hit hard by the foreclosure crisis.

Orange County would be receiving a $1 million share, and Santa Ana would be receiving $1.4 million. The U.S. Housing and Urban Development Department has thus far allocated nearly $7 billion nationwide under three rounds of the program.

The program’s goal is to have local governments use the money to buy, rehab and sell or rent homes and affordable housing units to low- to moderate-income families and thus stave off a sweeping drop in home values across whole neighborhoods.

But there have been delays along the way, especially in Orange County. As my story on the first two rounds of the program detailed, the county sat on the first round of money for nearly a year before approving a list of contractors to perform the work, and the city of Santa Ana had only put families into a handful of homes.

A report by the Federal Reserve Bank of Cleveland also highlighted problems with the program.

Glenn Hayes, executive director of one of those contractors, Neighborhood Housing Services of Orange County, had expressed frustration over the county’s delay and said his organization was going to have difficulty meeting the program’s deadlines.

Since then, both Santa Ana and Orange County have obligated 100 percent of their funds, and Santa Ana actually hit 110 percent, obligating $500,000 more than it received.

“Santa Ana probably generated some program income that went back into their account,” said HUD spokesman Brian Sullivan.

HUD made the deadline to obligate 100 percent of grantees’ program funds this month, and the results of a Government Accountability Office inquiry into HUD’s enforcement of the program’s deadlines was also expected this month.

However, a GAO official, Steve Westley, said the release date was pushed to Nov. 18 to take into account most grantees’ September deadline for obligations.

Though many of the 309 grantees obligated 100 percent of their funds, 96 of the grantees did not, according to a report from HUD.


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