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).
Media
Release
WASHINGTON
- U.S. Housing and Urban Development Secretary Steve
Preston today allocated a total of $3.92 billion to all states and particularly
hard-hit areas trying to respond to the effects of high foreclosures. HUD's new Neighborhood
Stabilization Program (NSP) will provide targeted emergency
assistance to state and local governments
to acquire and redevelop foreclosed properties that might otherwise become
sources of abandonment and blight within their communities.
"To
those areas trying to recover from the effects of foreclosure and declining
property values, help is on the way," said Preston. "Clearly, the
intent is to put this money to work in communities with the highest need and to
have a meaningful impact. Now the real work begins and HUD stands ready to
support these States and communities as they work to stabilize their
neighborhoods."
The
funding is provided through HUD's Community
Development Block Grant (CDBG) Program under the Housing and Economic
Recovery Act of 2008. These targeted funds will be used to purchase
foreclosed homes at a discount and to rehabilitate or redevelop them in order
to respond to rising foreclosures and falling home values.
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.
In
determining the allocations announced today, HUD followed Congress's
direction that grants be targeted to areas based on the number/percent of
foreclosures, subprime mortgages and mortgage defaults and delinquencies. HUD
took a data driven approach to this process, relying on numerous data sets from
government agencies and private sources.
HUD
also will issue specific rules that will assist communities in the
administration of this new program and to ensure, as Congress directed, that
these grant funds be obligated for specific activities within 18 months. This
Congressional timetable may present challenges to state and local governments
undertaking ambitious, and in some cases unprecedented, acquisition and
rehabilitation activities. Meanwhile, HUD is actively encouraging local
governments receiving direct grants to coordinate with each other, and with
their state governments, to make most effective use of available funds.
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.
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