HUD Announces $2B In Neighborhood Stabilization Grants

Posted by Orb Staff on January 18, 2010 No Comments
Categories : Mortgage Servicing

The U.S. Department of Housing and Urban Development (HUD) announced last week that it is awarding $2 billion in Recovery Act funding to states, local governments and nonprofit housing developers, under HUD's Neighborhood Stabilization Program (NSP), to spur economic development in hard-hit communities and create jobs. Nearly 60 grantees are receiving awards. A full list of grants awarded can be found on HUD's Recovery Act Web site.

The $2 billion in NSP grants awarded last week build on the work being done to help state and local governments and nonprofit developers collaborate to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer down-payment and closing-cost assistance to low- to middle-income home buyers, HUD says. Grantees can also create land banks to assemble, temporarily manage and dispose of foreclosed homes.

"Vacant homes have a debilitating effect on neighborhoods and often lead to reduced property values, blight and neighborhood decay," says HUD Secretary Shaun Donovan. "This additional $2 billion in Recovery Act funding will help stabilize hard-hit communities by turning vacant homes into affordable housing opportunities."

The awards will also require housing counseling for families receiving home-buyer assistance funds through NSP. In addition, it requires grantees to ensure that new home buyers under this program obtain a mortgage from a lender that agrees to comply with sound lending practices.

The NSP was created to redevelop hard-hit communities, create jobs and grow local economies by providing communities with the resources to purchase and rehabilitate vacant homes and convert them into affordable housing. Last year, HUD awarded nearly $4 billion in NSP formula funds to over 300 grantees nationwide to help state and local governments respond to the housing crisis and falling home values.

In addition, on Aug. 26, 2009, HUD awarded $50 million in technical assistance grants to help grantees more effectively manage the inventory of abandoned homes they purchase under the NSP. HUD's NSP technical assistance grants are helping NSP recipients to implement sound underwriting, management and fiscal controls; measure outcomes created by public funds; build the capacity of public-private partnerships; develop strategies to serve low-income households; incorporate energy efficiency into NSP programs; provide support and training on the operation of land banks; and train NSP recipients on HUD program rules and financial management requirements.

SOURCE: U.S. Department of Housing and Urban Development

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