Nearly $50 M in Bonds to Address Foreclosed Properties in CA Cities
The California cities of San Bernardino, Fontana and Ontario, which are all located in San Bernardino County, have been declared eligible to borrow almost $50 million under the federal government’s program to help them address their problems of foreclosed homes, joblessness and poverty.
The money will be in the form of private and public bonds that cities can use in their economic development projects.
Under the federal economic stimulus package launched this year, counties and cities across the nation were allocated a bond debt of $10 billion while private companies were allocated a bond debt of $15 billion.
Jim Morris, who works for San Bernardino Mayor Patrick Morris, said the bonds will help the city address the problem of foreclosed properties and fund economic development projects.
San Bernardino can borrow up to $17.7 million in public and in private bonds while Ontario can borrow up to $17.8 million in public and in private bonds. Fontana can borrow up to $13.5 million in private and in public bonds.
The loans will not be provided by the federal government, but cities and private companies will receive assistance in the payment of loan interests.
Morris said cities need to examine whether they really need the money and whether their target projects are really feasible because the money is still a loan even if it is a very low-interest loan.
San Bernardino received relatively large allocations because of record numbers of unemployed in the region. In May, the areas covered by San Bernardino, Riverside and Ontario reached a jobless rate of 13 percent, the second highest rate among large metro areas with a population of one million or more, based on a report released by the Labor Department in June.
San Bernardino’s jobless rate in May was higher than the nationwide unemployment rate of 9.1 percent. It is joblessness which is driving record numbers of foreclosed properties in the region.
Meanwhile, according to a report on foreclosure notices and foreclosed properties nationwide, nearly 51,000 homes in the San Bernardino-Riverside metro area received default and foreclosure notices in the first quarter of 2008. In June, 1.25 percent of all households in the metro area were in foreclosure.
All in all, even if the nearly $50 million bonds are loans, San Bernardino cities can still take advantage of the low interest loans as long as they craft viable projects that address the problems of foreclosed properties, joblessness and poverty.
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