T
he changes, effective immediately, will allow cities, counties and states to buy properties in mortgage default and uninhabitable homes with lingering code violations through the $4 billion Neighborhood Stabilization Program.
The program was started in the midst of the nation's foreclosure crisis, but a year later about a third of more than 300 local governments that got grants have barely made a dent in them, according to a recent report from the U.S. Department of Housing and Urban Development.
Some city, state and county officials say they have had trouble spending the grant money because federal rules are confusing and cash investors have often outbid them for residential properties.
![](http://archives.lincolndailynews.com/2010/Apr/03/images/ads/current/marten_sda032310.png)
"It became clear to us that the Neighborhood Stabilization Program as originally designed was too restrictive and limited the ability of our local partners to put this funding to work quickly, Mercedes Marquez, HUD's assistant secretary for community planning and development, said in a statement. "We need to be more flexible so our local partners can respond to market conditions and reverse the effects of foreclosure in these neighborhoods as quickly as possible."
James Miller, spokesman for the Florida Department of Community Affairs, which got $91 million to distribute to 24 cities and counties, called Friday's announcement wonderful news.
"It just broadens the pool of available properties that local governments can target," he said. "This opens up more possibilities for them."