The U.S. Department of Housing and Urban Development (HUD) has awarded an additional $1 billion in Neighborhood Stabilization Program (NSP) funding to all states, as well as to a number of counties and local communities. The grants represent a third round of funding through the NSP, which provides assistance to state and local governments to acquire, redevelop or demolish foreclosed properties.
A complete listing of the NSP3 allocations can be found here.
NSP3 follows up on HUD's announcement last week that it will partner with Fannie Mae, Freddie Mac, the National Community Stabilization Trust and national lenders to give NSP grantees the first crack at buying foreclosed and abandoned properties in NSP-targeted neighborhoods. The First Look program gives NSP grantees an exclusive 12- to 14-day window to evaluate and bid on properties before others can do so.
Funding for the NSP3 grants was included in the Dodd-Frank Wall Street Reform and Consumer Protection Act. To date, there have been two other rounds of NSP funding: The Housing and Economic Recovery Act of 2008 (HERA) provided $3.92 billion, and the American Recovery and Reinvestment Act of 2009 appropriated an additional $2 billion.
State and local governments can use their NSP grants to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer down-payment and closing-cost assistance to low- to moderate-income home buyers (i.e., households whose incomes do not exceed 120% of an area's median income).
In addition, these 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 will issue an NSP3 guidance notice in the next few weeks to assist grantees in designing their programs and applying for funds.