BiggerPockets

Funding to Help Stabilize Neighborhoods Hit by Foreclosure Possible

Thursday, June 10

The U.S. Housing and Urban Development has announced that the Obama Administration will now be working with Congress to find new ways to help local and state governments successfully combat the ongoing effects of home foreclosures through additional funding for the Department's Neighborhood Stabilization Program, which will also be known as NSP, and with foreclosure prevention counseling. 

They have also announced plans to transfer funds awarded through NSP1 that have yet to be committed to specific projects in hopes to drive more funding to the hardest hit communities.  There have been $6 billion in NSP grants awarded by HUD to help local and state governments respond to falling home values and rising foreclosures.  $4 billion have funded NSP1 through the Housing and Economic Recovery Act of 2008 and there was an additional $2 billion that funded NSP2 through the American Recovery and Reinvestment Act of 2009. 

The initial NSP1 funds gave each state government an allocation of $19.6 million without any regard to varying degrees of needs.  Now, the Department will recapture money from communities that have not yet used the NSP1 funding and transfer it to city and county governments that have suffered very high foreclosure or vacancy rates.

The Administration also plans to work with Congress on foreclosure counseling efforts to help homeowners that are facing foreclosure stay in their homes.  The HERA program has provided $150 million for housing counseling to connect homeowners with their mortgage provider or lender to explore options that will help keep them in their homes. 

Through the HUD's recapture process, the Administration will be using the resources we already have received.  They are hoping to build from the lessons learned and previous success from NSP 1 and NSP 2 with additional funding for a third round.  The program has been created to address the housing crisis, grow local economies and create jobs by providing communities with the resources needed to purchase and rehabilitate vacant homes.  Over 63,000 homes are projected to be helped by NSP1. These will include demolition, acquisition, home buyer assistance and new construction.  

For more information about the Neighborhood Stabilization Program and HUD's part in it, visit www.hud.gov.

Comments

1. 

   Kevin Kaczmarek Reply
   almost 2 years ago

   But what is the best way to get involved in the NSP program? Here in Metro Detroit (Wayne County) the funds have not been deployed or if they have its a mystery, and anyone we talk to in Wayne County doesn't have a clue. Is there a department in HUD that groups like ours can contact to avoid the localized government mishaps?

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