The nation’s top public housing official ventured into one of the most blighted sections in New Haven Monday as part of his visit to Yale, calling the city’s West Rock neighborhood “extremely isolated” and “impoverished.”

Six months after his department turned down the city’s application for a $35 million grant to improve the isolated community, Housing and Urban Development Secretary Mel Martinez said he and city leaders have reached an agreement on a new way to funnel federal dollars to the area.

New Haven Mayor John DeStefano Jr. said the city Housing Authority will not reapply for the once-coveted HOPE VI grant for the West Rock neighborhood next year, but will instead receive 680 housing certificates under the Section 8 program, which was originally designed to provide low-income residents with money to rent their own homes.

DeStefano said the city would, however, apply for a smaller HOPE VI grant to improve Fair Haven’s Quinnipiac Terrace housing project.

The city would be better served by the Quinnipiac Terrace proposal, since the location is more attractive to commercial developers, he added.

“It’s a more appropriate use of the grant,” DeStefano said.

Because New Haven can pool all its federal housing dollars together under its “Moving to Work” designation, DeStefano said the city would likely use the Section 8 funding in the same way it wanted to apply the HOPE VI grant, even though the programs were officially designed for different purposes.

Robert Solomon, the Yale law professor who heads the New Haven Housing Authority, said he thought Martinez’s visit to the city was highly productive.

“[Martinez] asked a lot of good questions,” Solomon said. “He’s a very thoughtful guy. He had lots of great things to say about New Haven, and we’re just delighted we were able to show him first-hand what we’re doing here.”

During his speech at Yale, Martinez credited Solomon with salvaging the Housing Authority, which the secretary said was “once one of the worst in America.”

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