At least another $6.2 million in federal money is heading to the St. Louis region to help neighborhoods that have been hard-hit by foreclosures.

The U.S. Department of Housing and Urban Development today announced a third round of funding under the Neighborhood Stabilization Program, worth $1 billion nationwide.

Of that money, $3.4 million will be awarded to the City of St. Louis and $2.8 million to St. Louis County. Another $5 million apiece will go to the States of Missouri and Illinois, some of which will likely be directed to the St. Louis metro area.

The money pays for local governments and community development agencies to buy and rehab properties that have gone into foreclosure. About $6 billion has already been spent in the first two rounds; this third round is funded by money from the bank reform bill Congress passed earlier this year.

The program is targeted at places that have seen high foreclosure and unemployment rates in recent years; in its first round in 2008, St. Louis County received $9.3 million and St. Louis City received $5.5 million. But it has proven difficult to implement at the neighborhood level, and some cities and states are expected to leave money on the table.

One challenge has been that local agencies that wanted to buy foreclosed houses were often beaten to the punch by investors or others with quick access to cash. Last week, HUD announced a new partnership with the National Community Stabilization Trust which will give local governments a two-week exclusive window to buy some properties.

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