A day after Southern Nevada lost out on a $367 million federal grant to help address the area’s foreclosure crisis, local officials got an explanation for the denial from the U.S. Department of Housing and Urban Development.
Las Vegas Mayor Oscar Goodman, who was among a dozen valley leaders at a meeting Friday in Las Vegas with HUD representatives, said agency officials felt the region requested too much of the $2 billion in grant money available to the entire nation for neighborhood stabilization.
“They believed we had a need, but not the capacity to spend that kind of money in the (four-year) period allotted,” Goodman said.
It appears HUD did not award partial grants to any areas.
On Thursday, Southern Nevada, which has one of the highest foreclosure rates in the nation, was denied funding in the second phase of HUD’s Neighborhood Stabilization Program, which is aimed at helping to place families in vacant, bank-owned homes.
Rep. Shelley Berkley, D-Nev., said Friday she shared her frustration over the decision with HUD Secretary Shaun Donovan in Washington.
“I am pleased that the Secretary heard me out, and after our conversation, I know he is very aware of the situation we face in Southern Nevada,” Berkley said in a written statement. “He indicated to me it was his understanding that Southern Nevada faced difficulties in utilizing resources that have already been allocated.”
The first part of the Neighborhood Stabilization Program, a $4 billion initiative, brought about $60 million to Southern Nevada. The use of that money did not have a direct impact on the decision to deny the region second-round funding, HUD officials said.
HUD received 482 grant applications, requesting a total of $15 billion, which required the agency to assess an area’s overall capacity to utilize funds.
That is where Southern Nevada got hurt, said Kenny Young, a North Las Vegas housing official who also attended Friday’s meeting in Las Vegas.
“We were told other areas had the ability to leverage (grant money) with nonprofit and private industry resources,” Young said. “Some areas even had money to pony up out of general funds to take on mortgages. We didn’t have the capacity to do that.”
Young said Southern Nevada could appeal HUD’s decision, but he doubted that would do much good.
Goodman said the region’s top priority now should be looking at how other federal money could be used to prevent foreclosures from happening in the first place.
Contact reporter Alan Maimon at email@example.com or 702-383-0404.