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In an effort to combat foreclosures and dismal home sales in Prince George's, potential homebuyers are now being offered up to $20,000 to buy repossessed homes in the county.

The Down Payment on Your Dream program, which County Executive Jack B. Johnson (D) unveiled at a news conference Wednesday, will use most of a $10.8 million federal grant to encourage new homebuyers to consider buying some of the vacant, foreclosed homes in the county.

"Home ownership by Prince Georgians is a high priority for my administration," Johnson said. "The Down Payment on Your Dream program is a way for the county to help our citizens share in and experience a part of the American dream by owning a place to raise a family and become part of the community."

When the real estate market began to decline in 2007, Prince George's was among the hardest-hit jurisdictions in the state. According to state reports, about 1,000 homeowners per year fell behind or lost their homes due to foreclosure, making up nearly one-third of Maryland's foreclosure activity.

Foreclosed homes can add to blight and bring down property values, and the slow home sales have left the county with deficits from lost real-estate-related fees.

About 494 people bought homes in Prince George's County in May, according to the most recent figures available through the Metropolitan Regional Information Systems, a national real estate tracking firm. However, more than 6,600 homes were up for sale, many waiting more than three months to be purchased, and most of the homes are now selling for about 20 percent less than they were in 2008.

Qualifying buyers willing to purchase a foreclosed home in parts of the county identified as having a large number of foreclosures can get up to $20,000 to help with closing costs and down payments, said Denise Roberts, spokeswoman for Johnson.

County officials believe they have enough federal funding to help sell 700 homes, though Roberts said that not everyone will qualify for the maximum amount.

To qualify, a potential buyer must be a first-time homebuyer or cannot have owned a home in the last three years. Buyers must have an income that totals less than 120 percent of the region's average, depending on the size of the family. For example, a childless couple looking to purchase their first home would need to make less than $99,000 a year to qualify. A single person with no children would have to have an annual income of less than $86,000 a year.

Buyers must have a real-estate agent and broker set up their purchase before applying for the county assistance, Roberts said. Housing officials estimate there are at least 3,000 homes in the county that could fall under the program.

Participants must also put up $2,000 toward the closing cost and attend an eight-hour seminar on homeownership.

The new program came after months of debate between county officials and real estate agents last year. County officials learned in October that Congress had given them nearly $11 million to combat foreclosures. County officials had initially proposed purchasing about 40 foreclosed homes, renovating them and then selling them on the open market. The shift to provide buyers with assistance came after real estate agents encouraged the county to help buyers directly.

About $9 million will go toward buyer assistance, Roberts said. The remaining $2 million will go to running the program and to purchasing and improving the worst foreclosed properties.

Real estate broker Brian Austin, who lobbied for the down payment assistance, applauded the program this week, which he said will boost the real estate industry after a year of slumps.

"The county was wise enough to use these funds to have the greatest impact," Austin said. "We're now able to share in a program that will either bring people to Prince George's County or get people who had been thinking about buying in the county off the fence."

The federal funding will last until July 2010. Officials said they hope success may bring more funding in the future.

Watch the press conference at www.gazette.net/video.

For information about the Down Payment on Your Dream program, go to www.gazette.net/links.