The grant will allow the Department of Neighborhood Development to support redevelopment of up to 275 foreclosed homes in Dorchester, East Boston, Roxbury, Hyde Park and Mattapan.

Buyers of foreclosed properties in those neighborhoods may be eligible for low-interest loans or grants of up to $50,000 for purchase and renovation costs.

“This award accelerates our ability to impact the foreclosure challenges that were facing,” said Mayor Thomas M. Menino in a statement. “We’re making important progress, but our neighborhoods are still in danger.”

Boston was one of 482 applicants requesting over $15 billion from the U.S. Department of Housing and Urban Development in foreclosure funding. Since passage of the American Recovery and Reinvestment Act, the city has received nearly $280 million in formula and competitive grants as well as bond allocations.

The NSP initiative was created as part of the Housing and Economic Recovery Act of 2008, designed to boost local economies through the provision of resources to purchase and rehab foreclosed homes. Boston received $4.23 million in 2009 during the first funding round, and later received a matching grant from the state. The latest award brings Boston’s total federal foreclosure funding to more than $21 million.

The campaign seeks to allow Boston’s neighborhoods to recover from the nationwide foreclosure crisis through targeted programs that support existing homeowners while adding new buyers to the market, among other things. Under the umbrella of this initiative, DND has overseen the direct acquisition of 33 units of housing, and is in the process of negotiating the purchase of more than 100 others from banks.

It ranks as one of the most tragic elements of the current foreclosure crisis.

I’ve heard my share of stories on this blog from homeowners who complain they have been strung along for months or longer, unable to get an answer back from their bank in time to close a proposed short sale.

Even more maddening, the banks are likely to take a bigger hit in the end foreclosing on the home or condo and then letting it fall into disrepair as it sits empty on the market.

Enter the Obama Administration, which has issued new rules it contends will help speed along short sales and help prevent needless foreclosures.

There are clearly some helpful elements in the Treasury Department’s proposal. Overall, it attempts to bring some order to what too often appears to be a nebulous process, establishing timetables and formal documents.

But there are some troubling aspects as well that leave me wondering whether this is a real effort to help or just an industry approved public relations gimmick. (For a different take on the new rules, check out Richard D. Vetstein’s post.)

Frankly, I’m skeptical

For starters, there appears to be a reliance on trying to use little bribes to get mortgage companies to comply, rather than the big stick of regulation.

Mortgage companies can get $1,000 for administrative costs, which seems strikingly similar to the Obama Administration’s efforts to use modest cash incentives to prod lenders to head off foreclosures by modifying loans.

Of course, that $75 billion initiative has been a dismal failure. Just check the foreclosure rates – they are soaring.

The new program is also voluntary for lenders who hold a second mortgage on a home – half of all homeowners in default fall into this category.

These lenders can stand to make up to $3,000 for agreeing to bow out – not much incentive for the holder of a $100,000 to $200,000 loan.

Of course, there’s a small carrot for homeowners here as well – they get $1,500 to pay for moving expenses.

Thanks Uncle Sam.

But the icing on the cake? The new rules won’t kick in until April 5th.

I am sure that’s just what the banking and mortgage industry lobbyists ordered up.

No need to rush things here, let’s just take our sweet old time.

But that’s not much help for homeowners on the edge of losing it all.