Government announces changes to help communities struggling to spend foreclosure money

Changes to federal foreclosure program announced

ST. PETERSBURG, Fla. — The federal government says it’s relaxing some rules to make it easier for communities to spend funds on redeveloping abandoned and foreclosed properties.

Changes announced Friday to a $4 billion program will allow communities to spend money on properties in mortgage default and uninhabitable homes with lingering code violations. The Department of Housing and Urban Development says the changes allow more properties to qualify for the program.

Some officials say they’ve had trouble with confusing and ever-changing federal rules for the money, awarded in the midst of the nation’s foreclosure crisis.

A recent report shows that a year after the Neighborhood Stabilization Program started, about a third of more than 300 local governments given the help have barely made a dent in their funds.