Half of the award, about $15 million, will buy a minimum of 205 homes in foreclosure and rehabilitate them, said Loretta Owens, executive director of The Housing Fund, one of the Nashville nonprofits that received the grant from the U.S. Department of Housing and Urban Development.
The money also will help 100 homeowners with down-payment assistance in a shared-equity program. The rest of the award will pay to develop 140 rental units on vacant property, officials said.
The money will go to neighborhoods in Antioch, in East Nashville on the west side of Gallatin Pike, in the Chestnut Hill area of South Nashville and in parts of North Nashville, Owens said.
In most of the targeted neighborhoods, about a quarter of homes in foreclosure were still on the market after a year, Owens said.
"What we found was, if we didn't intervene, we would see an increase in the supply of foreclosed homes, and as supply increases, values would really drop," she said.
The award makes possible the largest program of this kind ever in Nashville, said Phil Ryan, executive director of the Metropolitan Development and Housing Agency.
MDHA won the grant in a consortium with The Housing Fund, Urban Housing Solutions, the Woodbine Community Organization and Pinnacle Financial Partners, which has pledged $5 million in loans associated with the project.
"This was a very competitive process, and I'm delighted that Nashville's proposal was chosen," Mayor Karl Dean said. "This means new affordable housing, getting abandoned homes and neighborhoods reoccupied, and putting people to work."
Of 408 applications that were submitted to the federal Neighborhood Stabilization Program, Nashville was one of 56 winners.
No other application from Tennessee was funded.
In the Nashville area, the foreclosure rate in November was 1.36 percent, more than double the rate of November 2008.
As the Nashville consortium assembled its application, it found that the number of foreclosed homes in one neighborhood in North Nashville rose from 126 in 2007 to 256 after 18 months. In the targeted Antioch neighborhoods, the number of homes in foreclosure rose from 227 to 337 during that same time period.
Contact Bonna Johnson at 615-726-5990 or bjohnson@tennessean.com.
Mortgage plan fails to live up to goalsUncertainty in Housing Continues as Affordability Hits Record-High Yet Starts Decline
