Foreclosure money may be used for energy efficiency, heating aid

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(Host) Vermont stands to get $20 million from the federal government to help homeowners avoid foreclosure.

As VPR’s Ross Sneyd, the state hopes it can use the money to deal with other problems.

(Sneyd) Around the country, millions of people have lost their homes because they can’t pay their mortgages.

This summer, Congress voted to spend $4 billion to combat foreclosures.

The assistance will be welcome in places like Miami and Cleveland, where some neighborhoods have been decimated by the abandoned houses.

Last year in Vermont, foreclosures were up fourfold from two years before and have risen again this year.

Vermont’s problem isn’t as big as other parts of the country, but the money it will get is still significant.

David Mace of the Commerce Agency says Vermont will get about $20 million.

(Mace) “It’s a significant amount of money. For example, Vermont currently gets roughly $8 million a year in Community Development Block Grant funds. So this is almost tripling the amount of money we would get in a normal year for Community Development Block grants. So it could be a significant impact.”

(Sneyd) But Vermont needs to be able to spend the money.

Washington hasn’t written the rules for this program. It was designed to get money into the hands of homeowners so they can pay their mortgages and avoid foreclosure.

That’s not such a big problem here. Mace says the problem is less mortgage payments and more about keeping homes warm this winter.

(Mace) “While we haven’t seen a large number of foreclosures in Vermont, we do expect that there will be increased pressure on people as home heating fuel prices continue to rise and the weather continues to get cold this fall and winter. One of the areas that we might be able to use the funding for if we’re given that flexibility would be to assist Vermonters improve the energy efficiency of their homes to allow them to use the savings to make their mortgage payments.”

(Sneyd) Vermont is lobbying the Department of Housing and Urban Development as it writes the rules for the program.

Mace says the state wants to be able to spend the money on unconventional programs, such as heating aid.

And it wants to be able to funnel the money directly to agencies help Vermonters stay warm.

For VPR News, I’m Ross Sneyd.

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