HUD Launches Neighborhood Stabilization Program

Posted by Orb Staff on October 02, 2008 No Comments
Categories : Mortgage Servicing

U.S. Housing and Urban Development (HUD) Secretary Steve Preston has allocated a total of $3.92 billion to all states and particularly hard-hit areas that are trying to respond to the effects of high foreclosures.

According to HUD, its 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.

HUD plans to host a national housing summit in Washington, D.C., Oct. 7-8, as well as a series of regional conferences to explain the details of this new program to governors, mayors, county executives and other state and local leaders.

The funding is provided through HUD's Community Development Block Grant 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.

The NSP also seeks to prevent future foreclosures by requiring housing counseling for families receiving home buyer assistance. In addition, the agency seeks to protect future home buyers by requiring states and local grantees to ensure that new home buyers under this program obtain a mortgage loan from a lender who agrees to comply with sound lending practices.

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

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