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Fargo to use $4.8 million for housing

FARGO - The city of Fargo is planning to put nearly $4.8 million in federal funds to use buying foreclosed, vacant and abandoned properties and rehabilitating or replacing them with new housing.

The Neighborhood Stabilization Program funds are part of $19.6 million the Department of Urban Development granted to North Dakota, state officials said.

Senior Planner Dan Mahli said Fargo's plans include providing housing for seniors and homeless veterans, and low-income families. The city also plans to work with Habitat for Humanity and local high schools to build affordable housing, he said.

Mahli said city staff have been monitoring foreclosure auctions.

"Basically, what we are looking for are the toughest properties on the block" to rehabilitate or replace. "These are properties that nobody wants to touch."

Fargo's NSP application said the city had $51 million in subprime mortgages in March 2008. Subprime loans are typically made to borrowers at higher risk of default, the document said. Of the city's subprime loans, 36.1 percent, or $5,884,700 worth were in serious delinquency.

Fargo got most of the funds it sought. In its application, Fargo requested:

$2.97 million to buy 18 properties to rehab and resell. The money from the sales would be used to buy another 12 properties.

$1,765,000 was sought to buy vacant lots or to replace blighted properties with 80 units of senior housing and 12 units for homeless veterans.

Money to fund three homes to be built by Habitat for Humanity and high school students also was part of the request.

$200,000 was sought for homebuyer counseling and assistance.

Mahli said senior housing will be a major focus as Baby Boomers age.

"We just need to start planning for these Boomers," Mahli said. "They're going to need the housing."

Gov. John Hoeven's office recently announced Fargo will receive $4,771,600, Grand Forks will receive $4,380,000, and Bismarck will receive $2 million in NSP funds.

The North Dakota Housing Finance Agency will also administer $6.66 million for a number of other cities, including West Fargo, Casselton, Minot, Mandan, Jamestown, Williston, Grafton, Wahpeton, Lincoln, Devils Lake, Valley City, Dickinson and the four American Indian reservations.

Mahli looks forward to getting students from the North and South high schools' construction programs to build homes.

"They're fun projects," Mahli said.

Sue Myxter, the Fargo School District's director for career and technical education, said the program provides the students invaluable on-site experience as they work with plumbers, electricians and other tradesmen. The projects also are an exercise in citizenship, she said.

"It's a good way to give our students an even more real-life experience and ... to feel like we're giving something back to the community," Myxter said.

Myxter said three homes have been built by North High students since the 2001-2002 school year, and one was built by South High students in 2004-2005.

North Dakota's application for the program cited Fargo, Grand Forks and Bismarck as having the greatest needs, with 41 percent of all foreclosed homes and 42.1 percent of the state's 5,559 sub-prime mortgages.