The HUD grant, made possible by the Housing and Economic Recovery Act of 2008, was announced by President Barack Obama during a meeting in downtown Los Angeles. He said that the HUD grant is allotted to buying and rehabilitating abandoned and vacant foreclosure properties and reselling them with low mortgages.



Additionally, the grant is intended to rehabilitate loans and provide mortgage assistance to low and middle-income homeowners.

Obama pledged to rehabilitate streets flooded with abandoned and vacant foreclosure properties and turn them into prosperous neighborhoods.

The federal grant is part of the $731 million funds allotted for 48 states, including California, to soften the impact of foreclosures and sliding home prices on distressed homeowners and the housing market.

California's average home price drastically declined to $224,000 in February, way below the median price of $373,000 of the same month last year.

Meanwhile, Senator Harry Reid of Nevada has announced the release of the HUD grant of $72 million to help soften the staggering effects of foreclosure properties on the state and the housing market.

Overall, the state will stand to receive over $24 million, while $22 million will be given to Clark County. A federal grant of $14.7 million is allotted for Las Vegas, $3.2 million for Henderson and $6.8 million for North Las Vegas.

The federal grant is part of the Neighborhood Stabilization Program created under the Housing and Economic Recovery Act which was supported by Reid in 2008. Under the program, funds will be provided to local and state governments to buy, rehabilitate or develop foreclosure properties to reduce abandoned and vacant homes that are dragging down conditions in neighborhoods.

The grant will also be utilized to provide assistance to low and middle income homebuyers in paying their down payment for a property or closing costs.

Furthermore, the grant will help buy properties and lands, rehabilitate or demolish abandoned and vacant foreclosure properties and create an entity that will temporarily handle and resell vacant land to promote the redevelopment or reuse of distressed properties.

Reid explained that the grant will help caution the impact of falling home prices, control the rapid deterioration of the housing market and alleviate the foreclosure problem.