The federal Neighborhood Stabilization Program has started in Los Ba&#241;os, allowing city officials and the local chapter of Habitat for Humanity to begin decreasing the number of unoccupied foreclosed homes in town.</p><p>Habitat Westside and the city of Los Ba&#241;os are hoping to use $2.4 million to get 50 families into foreclosed homes by June, the deadline for spending the money.</p><p>Redevelopment Agency Director Elaine Post said she believes the city will meet the deadline.</p><p>"Yes," she said. "We met with Fannie Mae. They are going to be listing property in foreclosure."</p><p>Under the Neighborhood Stabilization Program the funding used to help people buy homes cannot exceed more than 1 percent below the foreclosed home's appraised value. Post said Fannie Mae has agreed to sell homes that meet that criteria.</p><p>She said 50 families could be helped by the program, which is primarily being operated through the Merced County Association of Governments. Forty of the families are working with the city. Ten others are likely going to work with Habitat Westside.</p><p>Ned Ryan, a member of Habitat Westside, said people will have the chance to apply for the gap funding through habitat on Sunday at 2 p.m. at New Beginnings Assembly of God, 821 West I St. Two other opportunities to apply will take place on Thursday and Dec. 3 at 6 p.m. at the United Methodist Church, 1031 Iowa Ave.</p><p>People who are interested in applying should bring valid picture identification, a current utility bill, 2007 and 2008 tax returns, one month's worth of paycheck stubs, recent bank statements and the names and phone numbers of employers and landlords.</p><p>Ryan said Habitat Westside originally planned to get families into six to seven foreclosed homes. Habitat is now counting on finding 10 homes. He said he's hoping that the nonprofit can find enough foreclosed homes on the market that can be purchased for one percent below appraised value.</p><p>Ryan said habitat has found one home already. He said an offer of $65,000 was accepted on a Falcon Street home. The residence was originally advertised for $70,000. The home is schedule to enter escrow this week.</p><p>Habitat Westside has $1 million in NSP funding to spend. Ryan said $700,000 of it will be used to buy homes, $200,000 will go toward remodeling and $100,000 will be set aside for administration costs.</p><p>The gap funding must go to home owners who qualify under affordable housing income guidelines. Ryan said he does not believe income restrictions will keep Habitat Westside from getting enough applicants. He said because salaries tend to be lower in the Central Valley there should not be a shortage of people who qualify.</p><p>The number of foreclosed homes in Los Ba&#241;os has meant less property tax revenue coming to the city. Mayor Tommy Jones said the NSP will help ease the problem.</p><p>"We were the epicenter of the foreclosure problem," Jones said. "It won't solve everything (but) the fact that we get those homes back paying taxes, all it can really do is help." </p><p>Reporter Corey Pride can be reached at (209) 388-6563 or cpride@losbanosenterprise.com.