Indiana might be in line for a lot more than the $20 million minimum each state will be allocated as part of the housing stimulus initiative signed by President Bush on July 31, according to a new IUPUI study.
The Center for Urban Policy and the Environment estimates Indiana could receive $80 million to $100 million in federal funding because foreclosures and mortgage delinquencies have hit Indiana harder than other states.
Congress asked the Department of Housing and Urban Development to write guidelines for how the $4 billion will be allocated, so predicting just how much Indiana will receive is difficult, Senior Policy Analyst Seth Payton wrote.
However, Payton said, "Indiana could get a fairly large sum of money because we've had this problem for such a long time," Payton said.
Even $100 million isn't much for a state like Indiana with more than 6 million people.
But if cities and other beneficiaries use the money wisely, it could have a fairly big impact, Payton said.
Most of Indiana's mortgage problems are in the Indianapolis area, Gary, South Bend and Fort Wayne.
Payton is reluctant to pinpoint the hardest-hit areas for fear of the negative publicity driving real estate prices even lower. But he said the northeastern tip of Morgan County and parts of Plainfield have experienced severe problems. Areas of Marion County also have been hit hard. Even areas of affluent Carmel have been clobbered, he said.
Foreclosures carry a punch. In 2004 in Marion County, each foreclosure within a one-mile radius cut the sale price of the average house by 3 to 4 percent - or $3,200 - the center estimates.
Cities could use the new money selectively to demolish or redevelop abandoned properties and counsel homeowners to prevent problems from worsening, Payton noted.