HUD Launches New Neighborhood Stabilization Program

By Caitlin Jones & A. J. Johnson
November 3, 2008 2 min read

The U.S. Department of Housing and Urban Development (HUD) has begun to implement the new Neighborhood Stabilization Program (NSP), which was established by the Housing and Economic Recovery Act signed on 7/30/08.

The law authorized $3.92 billion in federal grants to be allocated by formula to states and localities to help finance the acquisition and redevelopment Ã for sale, rental, or other eligible purposes Ã of foreclosed homes and abandoned properties located in neighborhoods with a high rate of foreclosures. The program’s aim is to help stabilize blighted neighborhoods.

HUD Secretary Steve Preston on 9/26/08 announced grantees and allocation award amounts, details of the funding allocation formula developed by HUD, and other information.

“To those areas trying to recover from the effects of foreclosure and declining property values, help is on the way,” Preston said in a news release. “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.”

On 10/6/08, HUD published a notice in the Federal Register providing details of the funding formula, the names of grantees and allocation amounts, and program details and requirements. The 308 grantees have until 12/1/08 to submit a funding application and proposed action plan.

The funds will be provided through HUD’s Community Development Block Grant program, and used to purchase foreclosed homes at a discount and rehabilitate or redevelop them. State and local governments can use their grants to acquire land and property; to demolish or rehabilitate abandoned properties; and/or offer downpayment and closing cost assistance to low- to moderate-income home buyers. In addition, 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.

HUD held a summit conference in Washington on October 7-8 to educate public officials and others about the program and how it will operate.

HUD has created a Web page for the program, at http://www.hud. gov/offices/cpd/community development/programs/neighbor hoodspg/

(Federal Register notice: http://edocket.access.gpo.gov/2008/ E8-23476.htm)

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