Foreclosures are few, but Alaska gets aid nonetheless

A rough plan for spending the $19.6 million was approved Monday by the head of the U.S. Department of Housing and Urban Development.

The money won't help homeowners about to lose their homes but instead targets areas with high numbers of foreclosures, or pockets of trouble within neighborhoods, said Bryan Butcher, director of governmental relations and public affairs for the Alaska Housing Finance Corporation.

"Our foreclosures are up just a little bit from what they've been in the last year or two, but we're still better off than any other state in the country," Butcher said.

While Montana's foreclosure rate was lower early in 2008, Alaska's now is the lowest, he said. As of Sept. 30, fewer than one in 100 of Alaska home loans were in foreclosure, or just .88 percent. California's rate was more than four times that, and in Nevada and Florida, the incidence of people losing homes to foreclosure is even higher.

The money will be spread around Alaska and could go to private groups with experience in the field, like Cook Inlet Housing Authority, officials said. The state is about to put out a request for partners to come up with ways to spend the money.

Organizations could use the money to buy already foreclosed properties at a discount from lenders, fix them up and sell them to people with moderate incomes, said Lona Hammer, a planner with Alaska Housing Finance Corporation.

A large chunk of the money, maybe 60 percent, will go toward buying up foreclosed or abandoned properties and renovating them for rentals affordable to people who don't make a lot of money, Hammer said.

A few people, maybe 20 or so, could get help with financing down payments, she said.

The goal isn't to bail out lenders, but to turn around neighborhoods with foreclosed, abandoned or derelict properties, said Lee Jones, a Seattle-based HUD spokesman.

The new Neighborhood Stabilization Program is supposed to prevent problems from escalating as evidenced by the "broken windows" theory of neighborhood decline, he said. If a broken window in one house goes unrepaired, says the theory, nearby houses are more likely to also go unrepaired.

"And more and more problems will begin to be developed. ... And it won't just be broken windows," Jones said. "Roofs that aren't replaced. Porches that begin to sag. Doors that begin to fall off the hinges."

The new program provides nearly $4 billion nationwide. California and Florida each are getting more than $500 million because their problems are so much worse, Jones said.

"You do have foreclosures (in Alaska). But it is a manageable problem," he said.

Find Lisa Demer online at adn.com/contact/ldemer or call 257-4390.