Mercy Housing Inc., a Denver-based affordable housing nonprofit, is seeking $10 million in federal stimulus money for proposed housing stabilization projects in two Spokane neighborhoods, along with similar requests in several other markets.

The Denver organization says it would use the grant money to buy foreclosed, abandoned, and vacant residential real estate properties here and redevelop them. It says it would target the East Central and Chief Garry neighborhoods in Spokane for such projects, because it believes those neighborhoods have the highest concentration of vacant, foreclosed, and abandoned properties in the city, and have been economically damaged by that situation, says Cynthia Parker, president of Intercommunity Mercy Housing, the Washington state arm of the nonprofit.

The redevelopment of real estate in the two neighborhoods may include commercial and residential uses, including multifamily rental housing and single-family homes in particular for low-income and moderate-income households.

Mercy Housing applied to the U.S. Department of Housing and Urban Development (HUD) for the grant funds about two weeks ago, and should know in November or December whether part or all of the grant will be approved, Parker says.

She says the organization would like to move forward on its work in the two Spokane neighborhoods by next spring.

In the meantime, she says, it will be examining properties in those neighborhoods, and identifying the types of projects that could be done to improve them.

Mercy Housing worked closely with the city of Spokane in its grant request, she says, adding that the city gathered data on its different neighborhoods.

"The city of Spokane was really helpful," she says. "They were very enthusiastic about trying to make something work."

The funds Mercy Housing applied for are available through the Neighborhood Stabilization Program 2, under the American Recovery and Reinvestment Act. The program is an allocation to assist in the purchase and rehabilitation of abandoned and foreclosed residential properties for the purpose of selling, renting, or redeveloping those properties. Applicants will compete for up to about $2 billion to carry out neighborhood stabilization programs.

HUD requires that all neighborhood stabilization program funds go to benefit people whose income doesn't exceed 120 percent of an area's median income. No less than 25 percent of the funds must be used to benefit people at or below 50 percent of an area's median income.

Mercy Housing works in 41 states, serves more than 115,000 people on any given day, and has participated in the development, financing, or operation of more than 35,000 homes. About 75 percent of Mercy Housing's portfolio is in rental units, and the remaining 25 percent is homeownership. It serves families, seniors, and people with special needs, such as the formerly homeless and the developmentally disabled.