Hall County officials are applying for a $1.15 million grant to help families with foreclosed homes and down payment assistance.

The county received nearly $2.3 million for the Neighborhood Stabilization Program from the Georgia Department of Community Affairs in 2009 and hopes to continue its success with the new grant.

"We've purchased 39 foreclosed homes, repaired and sold 10 of those, and we have two under a sales contract and five on the market," said Mary Ledbetter, executive director of Home Development Resources Inc. who manages the grant funds.

The funding specifically allows local governments to purchase and rehabilitate foreclosed residential property for resale, demolish blighted structures and redevelop demolished or vacant properties. All of the funds must be used to benefit families at or below 120 percent of area median income, which varies depending on location and household size.

"Once the house sells, the money comes back into the account and is used to purchase another unit, and right now, that's ongoing until March 2013," Ledbetter said. "We've been able to help several lower income families, some who were first-time homebuyers and needed down payment assistance."

In January 2009, the U.S. Department of Housing and Urban Development approved the Georgia Department of Community Affairs plan to distribute nearly $77.1 million throughout the state for projects that met Neighborhood Stabilization Program guidelines.

This year's grant is another step in that process.

"The $1.1 million will go toward target areas in the county," said Jessica Robinson, the county's grants manager. "It really shows Hall County's vision to purchase and redevelop houses."

Hall County finance officials held a public hearing Tuesday to obtain input from residents for the grant application. Ledbetter was the only community representative who attended the meeting.

"The state awarded additional funds to Hall County two times since the $2.3 million allocation because of our exemplary performance," Ledbetter said. "This will continue that program."

Established by Hall County and the city of Gainesville in 1996, Home Development Resources Inc. is a nonprofit organization that provides debt management education to the community, including first-time homebuyer seminars and foreclosure prevention counseling.

The group received publicity in 2009 after the Hall County Board of Commissioners questioned whether its administration of the $2.3 million grant was a possible conflict of interest.

This was the first time a housing grant had ever required a competitive bidding process. In the past, Home Development Resources administered all of the housing grants the county was awarded.

After three separate votes, commissioners allowed the group to administer the federal housing grant, edging out Habitat for Humanity in the request for proposals process. This year's application will go before the commissioners for approval, and the grant winners will be announced in June.