PROVIDENCE — Standing on a sidewalk lined with boarded-up houses in the city’s West End, Mayor David N. Cicilline yesterday announced plans to seek $10 million in federal loans to purchase, rehabilitate and, if necessary, demolish foreclosed properties that are blighting city neighborhoods.

The federal funds would be administered through the city’s redevelopment agency as part of the Housing Trust to provide no-interest and low-interest loans to purchase or fix up properties that otherwise might not qualify for financing. The funds also could be used to board up vacant houses, demolish those which are deemed beyond saving and improve the city’s tracking system for foreclosed and vacant properties.

The federal loans would supplement mortgages from commercial lenders or the state housing agency.

The application is the latest in a series of efforts the mayor has announced to try to mitigate the effects of soaring foreclosures in the wake of a nationwide housing market collapse and a global credit crisis.

The City of Providence has recorded 745 home foreclosures during the past year — the highest on record, Cicilline said at a news conference in front of 72 Ford St., one of a half-dozen foreclosed houses on the block.

“We’ve worked hard over the past five years to strengthen our neighborhoods by bringing in new investment and creating safer neighborhoods through community policing,” he told a group of politicians and housing advocates huddled under umbrellas. “Now we have to work even harder to protect those investments by using all of the resources at our disposal to ensure that the national foreclosure crisis does not take a greater toll on our neighborhoods.”

As the mayor spoke, a man watched from the doorway of a well-tended house across the street.

Peter E. Arcelay, a maintenance worker at a nursing home, said he bought the house at 75 Ford St. in 1985 for $17,000 and raised three children there.

Now, his daughter, Wendy, owns and lives in the Confederate-style house with a polished wood door and decorative glass. Yet the house is surrounded by vacant properties that are magnets for vandals and crime, said Arcelay, and its property insurance alone costs $16,000 a year.

“When I moved in here in 1985, it was the best people, working people,” he said. “Now, it’s a ghost town.”

The boarded-up house across the street, in front of which the mayor stood yesterday, fell into foreclosure last summer. The lender is listed in city records as California-based Freemont Investment & Loan.

Unable to collect the property taxes owed, the City of Providence put 72 Ford St. up for tax sale in August.

Developer Patrick T. Conley that month purchased $843,000 worth of tax liens from the city, and “evidently that was one of them,” he said yesterday, explaining why his name is listed on the city assessor’s records.

“But we don’t have the right to possess or do anything until a year” after the lien purchase, Conley said, which will be Aug. 3. State law gives the owner — in this case, the lender — a right of redemption on the property for one year, he said. After that, Conley said, he will file a petition to foreclose and take title to the property.

Conley, who has purchased numerous properties in the city through tax sales, said he does not know yet what he will do with 72 Ford St. once he has title to it. “Before you make rabbit stew,” he said, “you first have to catch the rabbit.”

It remains to be seen whether the $10-million federal loan program announced by the mayor will be able to encourage developers such as Conley to fix up and sell their properties at a time when house prices are declining.

The federal loans the city hopes to receive would come from the Section 108 program, which would be guaranteed by the city’s Community Development Block Grant funds and repaid through future CDBG allocations.

The program requires that about 70 percent of the money be used to create housing for low- and moderate-income residents, said the city’s planning and development director, Thomas Deller.

The Providence City Council will be presented with a resolution to authorize the Providence Redevelopment Agency to apply for the Section 108 loan next week, Deller said.

“Funding is very tight” in the commercial mortgage market right now, Rhode Island Housing’s executive director Richard Godfrey said at the news conference, but added that the state agency this week was able to sell $70 million in bonds that it plans to make available to borrowers in the state.

larditi@projo.com