Foreclosures and blighted homes are not yet a problem in Bismarck, officials say, despite the city's plan to apply for federal money earmarked to help with those issues.

"If the city or the state can't use the money, it will be redirected back to the communities that need it,"said Susan Redman with city planning."If it really can't be used, it'll go to, say, communities in California (for example)."

The city recently decided to apply to the state for about $1 million to $2 million in federal Neighborhood Stabilization Program Grant Money, part of a nearly $4 billion grant being awarded by the federal Department of Housing and Urban Development under a law passed by Congress in July. The state's delegation announced recently that the North Dakota maximum allocation could be $19.6 million.

The state's application is due Dec. 1; communities must apply to the state by Oct. 24.

The goal is to inject money into areas where foreclosed homes may be bringing down values, as well as rehabilitate dilapidated or abandoned homes and make the homes available for poorer families.

"It's basically to purchase foreclosed homes,"said Bonnie Malo, program manager for the state's Community Development Block Grants. "That's mainly what the whole bill is about, is to buy foreclosed property and to resell it to low and middle-income people."

Tran Doan, CDBGprogram administrator, said there are different needs in rural communities, too. The two are working on the application and must identify areas most affected by sub-prime lending, which will eventually turn into areas with the most foreclosed homes, Doan and Malo said.

"Our plan will be based on what the communities will submit to us,"Doan said.

But the state isn't facing skyrocketing foreclosures that are bottoming out the housing markets like its coastal counterparts, officials have said. Sen. Kent Conrad, D-N.D., said North Dakota thus far has been relatively insulated from the crisis.

Professionals in the real estate industry are confident with the market, and home prices haven't dropped in the last year.

Rick Clayburgh, president of the North Dakota Bankers Association, said sub-prime lending was not a problem here.

"There may have been a handful,"he said. "There was just not sub-prime lending in North Dakota,"adding that most sub-prime loans in the state were from banks outside of the state.

Regardless, each state may get a piece of the money and open the funds up for applications from communities.

In Bismarck, city planners say it could be used to buy and rehabilitate foreclosed homes to give to programs such as the Ruth Meiers Hospitality House or Habitat for Humanity. Redman, in Bismarck's city planning office, said it also could be used for financing when selling to a low-income family.

When asked if she thought Bismarck had a foreclosure problem, Redman said "no,"adding that there were a couple of abandoned, dilapidated homes the city could buy and fix.

Unfortunately, the program doesn't offer relief to those facing foreclosure right now; there are about 19 homes available for sale as a result of foreclosures, according to RealtyTrac.

"One of the things I would've liked to see is if it would've provided money for counseling families who are going though foreclosure, to help prevent it,"Redman said. "This seems to help with the aftermath."

The aftermath of foreclosed homes in the area won't be as apocalyptic as in the big-boom states on the coasts, said Nancy Deichert, the head of the Bismarck-Mandan Association of Realtors.

Prices have dipped about 4 percent in the area since last year, compared to the double-digit drops in larger markets.

"Remember, some markets experienced appreciation rates of 40, 50 and even 60 percent during the 'boom' years,"said Deichert in an e-mail. "Not sustainable. Now, those markets are seeing adjustments of 30, 40 and 50 percent."

There are 100 more homes on the market right now than there were this time last year, she said, adding the consumers seemed concerned that there's no money available to for home purchases.

But, despite credit requirements becoming a little more tight, there are still up to 95 percent financing loans available, she said.

(Reach reporter Crystal R. Reid at 250-8261 or at crystal.reid@;bismarcktribune.com.)