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HUD Looks to Deliver $2 Billion in Recovery Act Funding to Markets Hit by Foreclosure
Using the Neighborhood Stabilization Program, HUD will make nearly $2 billion available to markets hit hard by the foreclosure crisis.
WASHINGTON — U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced that HUD is now soliciting grant applications under the Department's Neighborhood Stabilization Program (NSP) to make available nearly $2 billion in Recovery Act funding to states, local governments and non-profit housing developers to combat the effects of home foreclosures. Applications for NSP funds will be due July 17, 2009.
Funded under the American Recovery and Reinvestment Act of 2009, this round of NSP funding will award grants to applicants who will target their efforts in areas with the greatest extent of abandoned and foreclosed homes. In addition, HUD will provide up to $50 million in technical assistance grants to help grantees better manage their neighborhood stabilization programs. Applications for NSP technical assistance will be due June 8, 2009.
"HUD is committed to getting these funds out quickly and effectively to help communities recover from the blight and vacancies that have become visual symbols of difficult economic times," said Donovan. "We have much more work to do to mitigate the impacts that foreclosures have had on local communities; however, innovative collaborations between local government, housing agencies, and non-profits and creative, green-focused uses of federal funds will create jobs and put us on the path to recovery."
HUD has already allocated nearly $4 billion in NSP grants to help state and local governments respond to rising foreclosures and falling home values. The additional $2 billion in NSP grants that HUD is making available today will further assist these state and local governments, as well as non-profit developers, to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer downpayment and closing cost assistance to low- to middle-income homebuyers. Grantees can also stabilize neighborhoods by creating "land banks" to assemble, temporarily manage, and dispose of foreclosed homes.
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 from a lender who agrees to comply with sound lending practices.
HUD is also offering up to $50 million in technical assistance grants to help NSP grantees to more effectively manage the inventory of foreclosed homes they purchase under the Neighborhood Stabilization Program. Once awarded, HUD's NSP technical assistance grants will help NSP recipients to:
- Implement sound underwriting, management, and fiscal controls;
- Measure outcomes in the use of public funds through accurate and timely reporting;
- Build the capacity of public-private partnerships;
- Develop strategies to serve low-income households; and
- Incorporate energy efficiency into State and local NSP programs.
- Provide support, technical assistance, and training on the operation and management of 'land banks; and
- Train NSP recipients and their subgrantees on HUD program rules and financial management requirements.
In addition, Secretary Donovan and the Department are committed to providing the highest level of transparency possible as Recovery Act funds are spent quickly and efficiently. It is vitally important that the American people are fully aware of how their tax dollars are being spent and can hold their federal leaders accountable. Every dollar of Recovery Act funds HUD spends can be reviewed and tracked at HUD's Recovery Act website. The full text of HUD's funding notices and tracking future performance of these grants is also available at HUD's Recovery Act website.