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Tucked into the economic stimulus package signed by President Barack Obama last week was $2 billion to expand a nascent and controversial program to help cities and states buy and fix up foreclosed homes.

Last month, the Department of Housing and Urban Development signed off on hundreds of grants from all 50 states totaling almost $4 billion. The Neighborhood Stabilization Program, as it’s known, was passed last year as part of a housing rescue plan that was regarded at the time as the most significant housing legislation in a generation.

But critics have assailed the program for the lack of money it will send some hard-hit communities, a dearth of oversight and the discontent stirring among residents who want a say in what happens to their neighborhoods.

"What houses are going to be involved? We still don’t know that and we’re a month away from the funds arriving," said Mike Aaron, president of the Livingston Avenue Area Commission, a group in a foreclosure-ridden area of Columbus, Ohio.

The total amount coming into Ohio, for example, is $258 million, and Columbus is getting $23 million of that. Those figures do not include new money from the stimulus package, and HUD has said it has not yet decided what the guidelines for the new grants will be.

Aaron said Columbus has rebuffed his group’s attempts to talk about the best ways to use money, which has already been awarded to the state.

"We need to be involved in the process," said Aaron, who is pressing for an oversight board of city officials and residents.

And then there’s back-biting about who gets how much.

The first-round money is being divvied up based on the number and percentage of foreclosures, number and percentage of homeowners behind on their mortgages and the concentration of subprime mortgages.

While the formula sounds fair, some of the results aren’t. California and Florida are both getting more than $500 million in federal help, even though California has 500,000 foreclosures — about twice the number as Florida.

Vermont, meanwhile, is getting the minimum of $20 million, even though the state had less than 150 foreclosures last year and the lowest foreclosure rate in the nation, according to RealtyTrac Inc.

Some city and county officials are also questioning the government’s math.

Almost one in 10 houses in Merced County, Calif., is in foreclosure, one of the highest rates in the country. Yet the county will get just $2 million of the money going to California.

The city, which has a foreclosure rate of 12 percent, will get just $1 online payday loans.4 million.

"Someone stopped me on the street and said, ‘Oh good, you got the funding. So what can you do with this money? Buy like four homes?’" city housing manager Masoud Niromaud said, adding that there are more than 1,300 homes in foreclosure in Merced. "Seems that they (HUD) could paid more attention to the formula — ran it a couple of times. They didn’t do that."

Economists say lenders will surely benefit from the plan, though it does not include enough money to be considered a significant backdoor bailout for banks.

"In terms of bailing out lenders, it’s hardly the biggest thing out there but surely there will be cases where the land purchases will be in least in part to help politically connected lenders," said Dean Baker, co-director of the Center for Economic and Policy Research, a Washington-based think tank.

In many cases, government officials plan to dole out the money to nonprofit organizations and smaller government entities that will purchase homes.

Critics and local housing officials are shaking their heads over the carte blanche grant recipients have in how they spend the federal funds. One South Carolina county said it would consider proposals to put homeless or HIV-AIDS patients in foreclosed homes eligible for the grant, while officials in Florida’s Miami-Dade County said they plan to snap up foreclosed apartments with grant money despite staunch public comment against it.

Many of the proposals called for renting out the homes to low- to moderate-income families.

On the streets of neighborhoods pockmarked with vacant houses, many residents said they’d welcome new neighbors no matter how they got into the homes.

"I would want to put somebody in it, whether they’re renting it or not. That’s a house that somebody could be in," said Cheryl Poole, 51, an Irmo resident worried about home values and the empty house across the street from her one-story ranch.

On the other extreme is Debra Oakley, 55, who said she isn’t so sure she wants a new neighbor.

The two houses to the left of her home are vacant, including one that nonprofit groups are being encouraged to buy using stabilization grant money.

"I’ve often wondered about what kind of people would move over there," said Oakley. "I like it just like that: vacant."

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