HUD: $50 Million In Recovery Act Funds To Assist Local Communities Stabilize Neighborhoods Hard Hit By Foreclosure

Technical experts will help communities better manage backlog of foreclosed homes

August 26, 2009 --

WASHINGTON - U.S. Department of Housing and Urban Development Secretary Shaun Donovan today announced HUD is launching a $50 million effort to help state and local governments address the inventory of foreclosed properties assisted under the Department's Neighborhood Stabilization Program (NSP). HUD is awarding $44.5 million to nine national organizations and another $5.5 million to help local communities purchase, rehabilitate and resell foreclosed properties in especially hard-hit neighborhoods.

Provided through the American Recovery and Reinvestment Act of 2009 (the Recovery Act), these grants will allow HUD to dispatch teams of experts to help improve the effectiveness of neighborhood stabilization programs, particularly in communities with few staff and technical expertise.

"I am proud to announce today one more resource for neighborhoods and communities that have been hit hard by the national foreclosure crisis," said Donovan. "Thanks to the Recovery Act, we are able to dispatch experts into these communities to help them better manage their neighborhood stabilization programs so that small problems don’t become big ones."

The Neighborhood Stabilization Program (NSP) was initially established under Division B, Title III of the Housing and Economic Recovery Act (HERA) of 2008 for the purpose of stabilizing communities that have suffered from foreclosures and abandonment, through the purchase and redevelopment of foreclosed and abandoned homes and residential properties. The Recovery Act provided additional funds for HUD to administer a second round of NSP grants to states, local governments, nonprofits and a consortium of nonprofit entities on a competitive basis. The Recovery Act also authorized HUD to establish the NSP-Technical Assistance (TA) program that is being awarded today.

HUD's NSP-TA grants will:

* Help NSP grantees to implement sound underwriting, management, and fiscal controls;
* Measure outcomes in the use of public funds through accurate and timely reporting;
* Build the capacity of public-private partnerships;
* Develop strategies to serve low-income households;
* Incorporate energy efficiency into State and local NSP programs;
* Provide support, technical assistance, and training on the operation and management of 'land banks;'
* Train grantees and their subgrantees on HUD program rules and financial management requirements; and
* Assist grantees and their subgrantees to develop materials on energy conservation or other Departmental or programmatic priorities.

State and local governments primarily use NSP funding to purchase foreclosed properties and rehabilitate them. Grantees can also offer downpayment and closing cost assistance to low- to moderate-income homebuyers or create "land banks" to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods.

Source: HUD