Amarillo may apply for more stimulus funds

The Amarillo City Commission will decide Tuesday if they want to apply for a grant to help low income Potter County homebuyers buy foreclosed homes.

The Neighborhood Stabilization Grant would be $1,579,681 from the Texas Department of Housing and Community Affairs, who got it from the federal government as part of the economic stimulus.

The TDHCA recently listed Potter County as one of the 25 Texas counties most in economic need.

Randall County is not on that list.

There would be two aspects to the program if ultimately the city receives the money.

In the first case, the city would buy foreclosed homes from lenders at a 15-percent discount of appraisal.

An eligible homebuyer would buy the house from the city. Eligibility is determined by income.

If a homebuyer is at 50% or less of the area median income, then the state would take that note on at a zero percent 30 year note."

In the second case, the city would pay up to $30,000 to go toward downpayment, closing costs or gap financing for eligible homebuyers who find their own foreclosed home.

That would be a forgivable note as long as they stay in the house for anywhere from five to ten years depending on how much assistance they get.

This is similar to Amarillo's "city assist" program except it only involves foreclosed homes.

Some see a problem with that.

Critics say they hope the money won't go to bail out banks that made bad loans.

In the end, the money would only help a few homebuyers as rehab costs and buying the houses will use up the funds relatively quickly.