Skyrocketing foreclosure rates across the country have left many communities on the path to blight, and local government officials are struggling to find solutions and funds to help rebuild the declining areas. Inman News reported last Friday that federal housing officials will host three regional summits this month to discuss foreclosure prevention efforts, including a program that's providing nearly $4 billion in grant funding to help state and local governments purchase and rehabilitate foreclosed homes.
The Neighborhood Stabilization Program (NSP) - which was created as part of Title III of the Housing and Economic Recovery Act of 2008, signed into law July 30 - is intended to help state and local governments acquire land and property, demolish or rehabilitate abandoned properties, and offer down-payment and closing-cost assistance to low- to moderate-income home buyers.
Targeted emergency assistance
Housing and Urban Development Secretary Steve Preston 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 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 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 acquisition and rehabilitation activities that are ambitious, and in some cases, unprecedented. Meanwhile, HUD is actively encouraging local governments receiving direct grants to coordinate with each other and their state governments to make most effective use of available funds.
The NSP initiative also seeks to prevent future foreclosures by requiring housing counseling for families receiving home-buyer assistance. In addition, HUD 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.
If you are an NSP grantee or interested in the program and would like additional information, you can fill out this form on HUD's Web site to contact a HUD NSP representative.
Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.
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