At one point, Steve Williams noticed that 61 houses in just two of the Cape Girardeau School District's attendance zones were sitting empty as the result of foreclosure or abandonment.

Williams, who is the housing coordinator for the city's Planning Services Department, knows that is not an unusual situation across America.

"In some areas around the U.S., whole neighborhoods are vacant," he said. "That's why we wanted to get involved with this."

Williams and others hope at least part of the solution will come from the Neighborhood Stabilization Program, which provides federal stimulus money to buy, repair and resell foreclosed homes to qualifying families who want to change from renters to homeowners.

Earlier this year, Cape Girardeau was awarded a $648,000 grant to participate; the money comes from the $1 billion nationwide Dodd-Frank Wall Street Reform and Consumer Protection Act.

The money, Williams said, will help local governments like Cape Girardeau keep neighborhoods from declining and help residents who are renters get into houses they own with the down payment and renovations already taken care of.

The need is so great that the pilot program was recently expanded to include both the Franklin and Blanchard elementary attendance zones, and Williams is optimistic the city will get more in the next round of funds. The original boundaries were Sprigg Street, the Mississippi River and Park Drive. The new boundaries extend out as far as Highway 177, Shawnee Parkway and Kingshighway.

The city has already bought nine homes that were foreclosed, and Williams hopes at least one of them will be available as early as December. Applicants must meet income guidelines and participate in financial counseling, homebuyer education classes and work with the counselors on any credit or budgeting problems they may have. Loans, which the applicant must qualify for, still come from financial institutions.

Applicants can make no more than 120 percent of the median income of Cape Girardeau County. Making the limit would get them into three of the homes that will cost more. Lower-income residents can make 60 percent of the median income to be considered for the other six. The guidelines are anywhere from one person, who must not make more than $45,000, to a family of four, which can make no more than $64,300.

The way the program works is that Williams identifies houses for repair that have been foreclosed on. The city buys the homes and subcontracts repair work. The houses are in various stages of disrepair. One only needs minor painting and touch-up work and the worst, bought for about $17,000, needs major work, he said.

With the cooperation of the not-for-profit 4-Sight Counseling of Cape Girardeau, the homes are sold to qualified applicants and the money goes back into the pot to continue the program.

"We're going to keep cycling the money through until it's gone," Williams said.

Loretta Kincaid is director of programs at 4-Sight. She said that as of Thursday 34 applications had been received from people who are interested in the homes.

"This is a government grant that wants to turn a bad thing into a good thing," she said. "The previous homeowner has their home foreclosed on, and that's bad. But getting the houses occupied is a good thing. This program is really about saving neighborhoods."

The city must buy the homes for no more than 1 percent less than their appraised valuation and after rehabilitation they cannot be sold for any amount greater than 85 percent of the appraised value. No one is making money, she said.

The target audience is people who may have credit problems and are looking to get their credit ratings improved and get a second chance at homeownership.

"But this is not just for low-income people," she said. "It's basically for the average Joe Blow."

smoyers@semissourian.com

388-3642

List of homes

62 Rivercrest Drive

241 O'Connell Drive

1935 Benjamin Court

510 Johnson St.

1324 Monticello Lane

1857 Martin Court

1120 N. West End Blvd.

1514 Rand St.

614 S. Pacific St.