The U.S. federal government has earmarked $45.4 million for Arizona as part of a nationwide effort to battle the effects of foreclosures, including bank owned rental properties, on neighborhoods and local communities. The money will be divided among several counties and cities in the state hardest hit by the housing market crisis.

Neighborhoods suffering from huge supplies of Mesa bank owned properties will be glad to hear that the county, along with Maricopa, will be getting a $4 million share from the U.S. Department of Housing and Urban Development's (HUD) latest round of financing. Tucson is set to get $2.1 million, while Pinal County will be given around $3.1 million.

The latest financing will be the third time for the state. Prior to the latest financial aid, $255 million were provided to battle the effects of Arizona bank owned properties, with the total divided into two rounds of financing. The money will be used to purchase and rehabilitate or demolish foreclosure properties.

According to HUD officials, the funds are meant to reverse the impact on neighborhoods of the huge numbers of foreclosed properties, including residential foreclosures and bank owned rental properties. They added that hardest hit areas are particularly targeted, with Arizona being one of the areas that has received the highest share of financing.

The process of selecting which areas will receive the highest share of federal funds involves taking into consideration the number of bank REO home foreclosures in cities and counties, HUD officials have explained. They added that the number of high interest and subprime mortgages are also considered, along with the number of households who are at least 90 days behind in their loan payments.

Officials from the department further added that they try to target specific neighborhoods or local areas. They reveal that local communities with high vacancy rates and huge numbers of abandoned and empty properties are usually prioritized. Unemployment rates and fluctuations in house prices are also part of the evaluation.

Federal officials have also explained that they do not merely rely on the number of foreclosed properties or bank owned rental properties in a community but also consider whether any financial aid will make an impact on certain neighborhoods. They stated that criteria varied among the three rounds of financing.

Original Post: Federal Aid Addresses Foreclosures and Bank Owned Rental Properties on BankOwnedHome.net.