Gerald McCush has a new kind of problem.

As the city’s community development manager, Mr. McCush dispenses St. Joseph’s annual share of Community Development Block Grant funds. The city’s slice of CDBG pie has shrunk to $1.75 million in the upcoming budget, but Mr. McCush has grown to expect funding cuts.

That’s what makes this problem different.

The city has received a one-time windfall of $2.6 million in Neighborhood Stabilization Program Funds from the Missouri Department of Economic Development. Instead of looking for money, Mr. McCush is looking for ways to spend it.

“We have a clock that started ticking on March 18 and we have to expend the money within three years,” Mr. McCush said. “They’re saying, ‘Spend it as fast as you can, but you have to spend it the right way and we don’t know how we want you to spend it yet.’”

The money is part of a $4 billion federal program to fight the rising number of home foreclosures and buoy declining property values.

The city will purchase and rehabilitate foreclosed or abandoned homes, then sell them to families that make 120 percent or less of the area median income. Not only will the program give families a chance to buy affordable homes, it will combat declining property values for owners that find themselves surrounded by empty homes.

“The purpose is not to prevent foreclosure, so I can’t use it for a homeowner in trouble,” Mr. McCush said. “This is for the city to buy up foreclosed properties.”

The program restricts the city’s activity to four specific census tracts. The city will focus on an area bounded by 22nd Street on the west, 32nd Street on the east, Messanie Street to the north and U.S. Highway 36 to the south.

“I want to target it in an eight-to-10-block area, so I really can make an impact in that area and then move further out,” Mr. McCush said.

Private buyers still have a chance to purchase property before the city puts in a bid. The program restricts the city from buying any property until 90 days after it has foreclosed.

“We’re not going to try to make a profit off these,” Mr. McCush said. “We’re going to buy them for what they’re worth, fix them up and sell them for what we’ve got in them. We hope people see this as a bargain.”

The state will evaluate each city’s program after 18 months to see if they are on pace to spend the money. If not, funds will be shifted between cities to ensure Missouri spends as much of its federal money as possible. For example, if St. Joseph spends just 10 percent of its money after 18 months and other communities run out, the state would spread a portion of St. Joseph’s money to the cities in need.

Mr. McCush expects the city to complete its grant paperwork and be able to start spending money by June 15.

Clinton Thomas can be reached at clintonthomas@npgco.com.