Stimulus funds pave way for affordable new homes

06.08.09
By Lewis Green

The residential real estate crisis has not only contributed to the toppling of financial giants and the decline of the stock market, but it has meant many families have been displaced from their homes.

The slowdown in new construction of homes and fewer property sales have led to job losses in many related industries.

Foreclosure rates have spiked around the country with Nevada, California and Florida being some of the hardest hit states.

More recently, with home prices falling, many families are considering purchasing a property - assuming they can obtain an affordable mortgage loan. Deteriorating personal finances, late payments on bills and foreclosure filings have affected the credit score of many individuals and are hampering their ability to secure a home loan.

Some consumers have already benefited from government programs intended to stabilize the residential housing market - from refinancing mortgages to helping families devise better payment schedules to educating homeowners about their mortgage policies.

Last week the Treasury announced an additional $135 million from the stimulus package will be funneled to projects in Iowa, Maine, New Hampshire, Rhode Island and Washington.

"This initiative will help to spur construction and development, create much needed jobs, and increase the availability of affordable housing for families around the country," said Treasury deputy secretary Neal Wolin.

Funds like these are desperately needed in many parts of the country. According to the Treasury, housing starts have fallen by 80 percent since peak levels recorded in early 2006 and the number of houses currently under construction has fallen to a 13-year low.

The government says money is needed to build affordable housing now more than ever because the demand for this type of property has escalated during the recession.

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Stimulus funds to spur housing starts in five states