AURORA, Colo. -- Colorado has been hard hit by the foreclosure crisis, and one metro area city is taking the lead in addressing the negative impacts.

Using $4.5 million in federal grants, Aurora is aggressively purchasing foreclosed homes, fixing them up and flipping them.

"What it does is take the property that is valued the least in that neighborhood and makes it valued the highest,” said Joseph Garcia, manager of Aurora’s community development division. “Now, when other properties in that neighborhood sell, they’re going to use our house as a comparable and that helps stabilize the economic value of that neighborhood.”

It’s called the Neighborhood Stabilization Program. Other communities are doing the same thing, but not as quickly as Aurora.

“We’ve purchased 26 single family homes,” Garcia said. “We fix everything from sewer lines to windows and install energy efficient furnaces.”

Sale proceeds are plugged back into the program to purchase more foreclosed homes.

Aurora sees anywhere from 3,000 to 6,000 foreclosures a year.

Garcia said foreclosures diminish the value of neighborhoods, create blight and can lead to crime.

They can also take a toll on the city’s bottom line.

“When you have properties valued so low the tax base is less,” Garcia said. “When you rehabilitate them and you bring that property back up to market value and you get a family in there for the long-term that does a number of things. It stabilizes the community, and it helps get a family into affordable housing that is energy-efficient and low-maintenance.”

“I’m glad,” said Sheila Tunverde, who lives next door to one of the rehabilitated homes. “It used to look very bad. It used to be like it was falling apart, but now it’s really nice.”

When asked if the rehabilitated house helps her property value, Tunverde said, “Of course.”

Property owner Orlando Martinez said the program can help the neighborhood, but added that he’s concerned about who might move into the homes.

“They have to make sure the new owners are going to be able to maintain the property and that there is no more vandalism, drugs or prostitution.”

Garcia said the homes will be sold to working families.

“Because of the funding mechanism, we’re making sure that those families can afford them because we don’t want the cycle of foreclosure to start all over again,” he added.

Garcia said a big side benefit of the program is the job creation.

He estimates that up to 33 jobs are created every time the city purchases, repairs and sells a home.

“Those are jobs that wouldn’t be there if it weren’t for this program,” Garcia said.

Another benefit is the confidence the improvements instill in other property owners.

Garcia said it’s no coincidence that where the city has fixed up property, nearby homeowners are doing the same thing.

For information on who can qualify to purchase a city rehabilitated home, contact the City of Aurora Community Development Division at 303-739-7900.