Fauquier County is working to get funds from the Neighborhood Stabilization Program. The latest information says that they're seeking a grant of $2 million with which to purchase foreclosed homes. They also acknowledge that they're more likely to get only $1 million.

There are certainly still a fair number of foreclosed homes around. Out of the 75 homes sold in Fauquier last month, 28 of them were foreclosures. Out of those 28, 15 would fall into the price range (130K to 250K) that the county is looking at.

But the number of foreclosures in the lower price ranges is shrinking and they are often snapped up fast, sometimes these days, even with multiple offers. It will be interesting to see if a government entity can be nimble enough to compete with the first time buyers who are snapping these up.

The other complication here is the appraisal requirement for the program. In order to qualify for the program the Fauquier can not pay more than 85% of the appraised value of the home. Since the typical homebuyer can get a mortgage as long as the appraisal is 100% or more of the purchase price the bank will certainly find the county's offer more risky. If I'm the asset manager for the bank and I had multiple offers, I'd almost never choose the county offer.

I say all this not to trash the Neighborhood Stabilization Program. It was a good idea. The problem has been in the execution.

While in October 2008 the county was shown as having 228 bank owned properties., the MLS currently lists only 29 for sale in Fauquier County.

In the time it took to roll the program out and talk the counties into participating and then have them put together packages, the worst of the crisis has passed.

The program will still do some good if they're able to actually buy homes. It will help working families afford a home of their own in what is still a relatively high cost living area.

But no one should believe that this program will have any impact on stabilizing market conditions in any neighborhood. Time and the market appear to have already taken care of that.