Step Aside, Florida. It’s California’s Turn.

There’s
not nearly as much housing help as the $4 billion the Bush
Administration delivered
in September
. Of the $731
million President Obama handed out this time,
though, at least California got the
lion’s share.

Both
rounds were part of the Department of Housing and Urban Development’s Neighborhood
Stabilization Program
; Thursday’s funding was part of this year’s
stimulus bill. The program was created last year to help states and some local
communities buy, renovate, sell or develop foreclosed or abandoned homes.

The new
round, which Obama announced Thursday during a trip to California, includes $145 million for
statewide programs.

An additional $21.7 million goes to local governments, much of that to the City of Modesto
and Stanislaus County
in the hard-hit Central Valley. It’s probably
not mere coincidence that the $15.7 million infusion of stimulus money helps
give Blue Dog Rep. Dennis Cardoza political
cover in the core of his district.

The money
is no political gift, though. According to February statistics from RealtyTrac, Modesto’s foreclosure rate is the
fourth-highest in the nation. California
continues to lead the states, with foreclosures increasing 51 percent over the
previous year and 5 percent over the previous month.

It’s nice
that an administration finally recognizes those statistics.

In
September, HUD data evaluated California’s risk that homes would be abandoned
as “low” and Florida’s as “medium” in deciding to award
Florida $541 million and California $529 million.

California
officials were baffled and outraged.

“Frankly, it is beyond us how California
— which has nearly twice the amount of foreclosure filings than Florida — could receive
less assistance. This makes no sense, and is totally unacceptable,” Sens.
Dianne Feinstein and Barbara Boxer wrote then-HUD Secretary Steve Preston.

The
September calculations for “abandonment risk” were based on U.S.
Postal Service vacancy information and federal data on high-risk
loans
. The scores did yield interesting results.

Alabama, with only a 3.6 percent foreclosure rate over the 18
months previous, was considered a “high” abandonment risk, while California, with a 6.7
percent foreclosure rate, was deemed a “low” risk. Florida’s foreclosure rate was placed at 8 percent – the California senators
dispute that figure, which was based on Mortgage Bankers Association
National Delinquency Survey and not actual filings – and called a
“medium” risk.

Criticism
of the program didn’t end with concerns about the formula. Since the first
round was delivered, concerns have popped up in many states about lack of
guidelines for how the money should be spent.

In
classic examples of NIMBY-ism that balks when neighborhoods shift away from
owner-occupied, some people have said they’d rather see abandoned
properties razed than rented
.

It probably won’t allay NIMBY concerns, but HUD does
allow the money to be used to help low and moderate income buyers with down payments and
closing costs.

There’s also a provision to prevent subprime-loan
shivers from running down you spine: All buyers receiving help will have to
undergo financial counseling, and the financing must be from an institution that agrees
to follow sound lending practices.

The less
than $700 million California
has received in both rounds is a drop in the bucket when it comes to solving
the state’s foreclosure crisis. But it at least offers some hope to people who
would like to see their neighborhoods look less like ghost towns.