They call it the "flip." Buy fixer-upper. Fix up. Sell. Repeat.

In better times, flipping houses spun gold for the get-rich-quick set. Now, as foreclosures flood the market and yank home values lower, few have the stomach or the credit to flip but the rich and the brave.

And, soon, your local government.

Cities and counties across the East Bay are set to become house flippers under an emergency federal program aimed at stabilizing neighborhoods hit hardest by the foreclosure epidemic. Antioch, Richmond, Oakland and Alameda and Contra Costa counties will receive a combined $24 million, much of it to buy, rehabilitate and sell foreclosed and abandoned homes. More may come when the state doles out its $145 million share of the $3.9 billion program, part of a housing recovery bill President Bush signed this summer.

The aim is to boost ravaged neighborhoods by cleaning up and selling empty, bedraggled homes to lower-income buyers. But as they move quickly to lay out plans for a program that will launch early next year, local officials say hastily written federal regulations and waves of new foreclosures will make it hard to do much good.

Among the strings: The local agencies must make lowball offers to banks — 10 percent to 15 percent below today's market value. The idea was to keep banks from profiting. But whether they will be willing to sell that cheaply remains uncertain. Competition from investors could limit the

"It's incredibly difficult to get these lenders to respond," said James Kennedy, Contra Costa County's redevelopment director. "Frankly, they lack the economic incentive to respond."

With its $6 million allocation, the county plans to target North Richmond, San Pablo, Montalvin Manor and Rollingwood on the west side, and Bay Point and Oakley to the east. A quarter of the money must go to help very low income people. At a meeting this week to discuss the plan, county officials said they may be able to turn over 50 to 100 properties in the five-year course of the program. The county has seen about 4,000 foreclosures in the past few years.

"It'll be a drop in the bucket relative to needs out there," said Kennedy of the foreclosure epidemic. "Frankly, it's overrun everybody. It's overrun our budget and it's overrun our communities."

Tight restrictions on the money don't help, said Sean Rogan, Oakland's deputy director of housing and community development. Federal officials, concerned over potential abuses, set rules that may make it hard to find not just sellers, but buyers. If the cities and counties pay more to buy and fix up the houses than they can sell them for, the rules could prevent those buyers from profiting as the home value rises, leaving less incentive to buy, said Rogan.

The regulations are "pretty draconian and pretty onerous," he said. "It would have been nice to have a little flexibility."

A continued market slide could create trouble for cities and counties, said Janet Kennedy, housing coordinator for Antioch, which will see $4 million from the program and may link up its first-time home buyer program to help turn over the homes. The program is slated to run five years, with the money going back to the federal government at the end.

"I have more questions than I have answers," she said. "We don't even know if the lenders or the banks are going to go along with it."

Several of the agencies plan to join forces to buy moribund homes in bulk from willing banks. Hard-hit Pittsburg did not receive an allocation, though it is pushing for a share of the state money. Many of the agencies plan to work with nonprofit groups, such as Habitat for Humanity, to help buy and rehabilitate the homes and secure loans for buyers, who may also be asked to work on the homes. The plan also allows the agencies to buy properties and demolish homes to make way for low-income housing. Some cities would rather not enter the home-buying business directly.

"We don't want to own the property. We don't want to be in the property management business. But we do want to leverage any opportunity we may have to take these vacant properties and put families in them," said Janet Kennedy, who noted hidden costs in code enforcement and sometimes police when houses remain empty.

Federal officials said the money must be spent in areas with high foreclosure rates and the highest risk of new foreclosures, based on the number of subprime loans. Richmond, for instance, plans to direct a chunk of the city's $3.3 million share to the 94804 ZIP code, where one in eight homes are expected to reach foreclosure within 18 months. "The irony here is that the same amount of money spent a year ago by the federal government would have kept millions of people in their homes," said County Supervisor John Gioia. "It's too little, too late."

Reach John Simerman at 925-943-8072 or jsimerman@bayareanewsgroup.com.