Fairfax County is developing a program to allow as many as 100 first-time home buyers to purchase foreclosed houses at cut rates to bolster the county’s affordable-housing efforts and help prevent the region’s mortgage crisis from causing neighborhood decline.

Dubbed the Silver Lining program, county housing officials have proposed spending as much as $6.4 million over two years to help such middle-income professionals as teachers, police officers and firefighters afford the region’s housing. With county loans, qualified buyers would be able to purchase the properties directly from participating banks at below-market prices and be eligible for low-interest mortgages.

Although Fairfax has not been hit nearly as hard by foreclosures as neighboring Prince William and Loudoun counties, the number of foreclosures has risen dramatically as a result of the subprime mortgage crisis — from 198 in 2005 to 4,527 in 2007. Most of the foreclosures are clustered in Springfield, Herndon, Centreville and the Route 1 corridor. The situation has raised concerns about depressed property values, a decline in maintenance and higher rates of crime, including vandalism.

The effect of foreclosures on surrounding neighborhoods and the county overall is real and measurable. Citing the Center for Responsible Lending, the report notes that foreclosed properties with subprime loans in Fairfax lost an average of $5,545 in value. It also states that as many as 65 properties around a foreclosed property lose value. With about 3,000 properties in that category, that means declines in property values could envelop entire communities. It also means that the county’s housing stock has lost more than $1 billion in real property value.

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