HUD approves $731 million in Neighborhood Stabilization funding for 48 states and local communitiesMortgagePress.comHUD, Shaun Donovan, foreclosures, Neighborhood Stabilization Program
U.S. Housing and Urban Development Secretary Shaun Donovan has
approved nearly $731 million in funding for 48 states and local
communities seeking to recover from the effects of high
foreclosures and declining home values. Funded under HUD's
Neighborhood Stabilization Program (NSP), these plans will target
emergency assistance to particular neighborhoods by acquiring and
redeveloping foreclosed properties that might otherwise become
sources of abandonment and blight.
The neighborhood stabilization plans approved today include a
$145 million plan submitted by the State of California, a program
President Barack Obama recognized during a town hall meeting today
in Los Angeles.
"These funds will be used to buy up and rehabilitate vacant
foreclosed homes and resell those homes with affordable mortgages,"
said President Obama. "They'll allow California to provide mortgage
assistance and rehabilitation loans for both low-income and
middle-income families. This is how we'll help people here in
California live their dream of homeownership and how we'll start
transforming abandoned streets lines with vacant houses into
"Our goal is to help communities throughout California turn
these houses into homes again," said Donovan. "California is
clearly struggling with a brutal foreclosure crisis and we must
make every effort to help to help communities prevent these
foreclosed properties from becoming a source of neighborhood
HUD's Neighborhood Stabilization Program was created under the
Housing and Economic Recovery Act of 2008 and provides nearly $4
billion to every State and certain local communities experiencing
particularly high foreclosure problems and risk of property
abandonment. The program permits these State and local governments
to purchase foreclosed homes at a discount and to rehabilitate or
redevelop them in order to respond to rising foreclosures and
falling home values.
In addition, the American Recovery and Reinvestment Act of 2009
makes available another $2 billion of NSP funding to State, local
governments, non-profit entities, or consortia of non-profit
entities for similar anti-blight and stabilization efforts. HUD
will issue a funding notice with application requirements no later
than May 3, 2009. Applicants will prepare an application and, for
programmatic funding, complete citizen participation before
submitting to HUD. HUD will review applications and make awards
State and local governments can use their neighborhood
stabilization grants to acquire land and property; to demolish or
rehabilitate abandoned properties; and/or to offer downpayment and
closing cost assistance to low- to moderate-income homebuyers
(household incomes not exceed 120 percent of area median income).
In addition, these grantees can create "land banks" to assemble,
temporarily manage, and dispose of vacant land for the purpose of
stabilizing neighborhoods and encouraging re-use or redevelopment
of urban property.
The NSP Program also seeks to prevent future foreclosures by
requiring housing counseling for families receiving homebuyer
assistance. In addition, the Agency seeks to protect future
homebuyers by requiring States and local grantees to ensure that
new homebuyers under this program obtain a mortgage loan from a
lender who agrees to comply with sound lending practices.
For more information, visit www.hud.gov.