WASHINGTON - Baton Rouge will receive a $2 million federal grant to help stabilize neighborhoods hard-hit by foreclosures, federal officials said Wednesday.

The U.S. Department of Housing and Urban Development grants announced Wednesday will provide the aid to help East Baton Rouge Parish to buy and redevelop foreclosed properties that otherwise might become abandoned and blighted. Baton Rouge faces a 3.9 percent foreclosure rate, according to HUD.

The money is part of $38 million awarded throughout Louisiana. The state will receive $34 million while the city of New Orleans will also receive $2 million. The state has a similar foreclosure rate as Baton Rouge, considered by HUD to be "medium." New Orleans has a slightly higher rate at 4.4 percent, according to HUD.

The money is part of $3.9 billion allocated by HUD through its Neighborhood Stabilization Program to handle the impact of the high rate of foreclosures. The funding is provided through HUD's Community Development Block Grant program.

The grants can be used to buy land, demolish or rehabilitate abandoned properties and offer down payment. The funds can also be applied to closing costs for low- to moderate-income homebuyers. The purchasers must have a household income that does not exceed 120 percent of the area's median income.

The funds can be also used to create "land banks" to assemble, temporarily manage and dispose of vacant land in order to bolster neighborhoods and encourage reuse or redevelopment of urban properties.

The award was announced by U.S. Sen. Mary Landrieu, D-La., who said in a statement that the housing crisis is plaguing neighborhoods in states across the country. "We have the added challenge of rebuilding properties that have been destroyed by Hurricane Katrina and Rita, and more recently Gustav and Ike," she said. "Homes in Louisiana have been abandoned because the aftereffects of hurricane after hurricane have left them uninhabitable."

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