Los Angeles to receive federal aid to cope with foreclosure crisis

LOS ANGELES, Sept. 26 (Xinhua) -- The city of Los Angeles is to receive about 33 million dollars directly from the federal government to buy and fix up distressed homes, the Department of Housing and Urban Development (HUD) announced Friday.

Meanwhile, city officials said that in the next few months, the city could also get money from the state of California, which has a pool of 145 million dollars to allocate to communities.

With more than 13,000 foreclosed homes in the city, Los Angeles City Councilman Ed Reyes warned that the federal funds would go quickly.

As part of a housing bill approved in July, DHUD's neighborhood stabilization program gives money directly to local governments to buy and fix up foreclosed homes.

Under the program, governments can demolish or rehabilitate blighted homes, then either resell them or use them for affordable housing.

Critics of the program say it could hurt recovery, explaining that governments will now be competing with lenders and private homeowners who have been struggling to sell in a depressed market.

The HUD also announced that it will allocate more than 521 million dollars in federal aid over the next 18 months to California and many of its communities hardest hit by the foreclosure crisis.