January 14, 2010
HUD SECRETARY DONOVAN ANNOUNCES $10 MILLION IN RECOVERY ACT GRANTS TO STABLIZE NEIGHBORHOODS, REBUILD ECONOMIES IN
Neighborhood stabilization grants to the First State neighborhoods hard hit by the housing crisis
WILMINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today announced that HUD is awarding $10 million in Recovery Act funding to the Delaware State Housing Authority under HUD's Neighborhood Stabilization Program (NSP). The NSP grants announced today are part of $2 billion awarded nationwide to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes while creating jobs.
Funded through the American Recovery and Reinvestment Act of 2009, this round of NSP grants is being awarded competitively to applicants who developed the most innovative ideas to address the impact the housing crisis has
had on local communities, while demonstrating that they have the capacity to be responsible stewards of taxpayer dollars.
"Vacant homes have a debilitating effect on neighborhoods and often lead to reduced property values, blight, and neighborhood decay," said Donovan. "This additional $2 billion in Recovery Act funding will help stabilize hard hit communities by turning vacant homes from eyesores into community assets. The Neighborhood Stabilization program
is a key part of the Obama Administration's comprehensive approach to address the national housing and economic crisis."
Delaware State Housing Authority has been awarded $10,007,109 in NSP2 funds. These funds will be used to
address housing market failures in targeted areas across 27 census tracts suffering from high foreclosure rates, subprime mortgages, unemployment, and decreasing market values of homes. The State proposed to purchase and rehabilitate 139 foreclosed homes and make them available to households whose income does not exceed 120
percent of the area median income, with 25 percent of the funds to be used for households at or below 50 percent
of median income. The State also proposed to provide new market tax credit equity to return another 46 foreclosed units to use. Delaware's goals in executing this program are to increase demand for homes through the availability of
financing mechanisms, improve homeownership rates, provide a stock of permanently affordable homes, stabilize the housing market to avoid further decline, and encourage further investment in the area. Delaware will also leverage $5,200,000 in other funds to help stabilize the targeted areas.
The Neighborhood Stabilization Program was created to confront the effects of the housing crisis, create jobs, and grow local economies by providing communities with the resources to purchase and rehabilitate vacant homes and convert them to affordable housing. Last year, HUD awarded nearly $4 billion in NSP formula funds to over 300 grantees nationwide to help state and local governments respond to the housing crisis and falling home values.
On August 26, 2009, HUD also awarded $50 million in technical assistance grants to help grantees more effectively manage the inventory of abandoned homes they purchase under the Neighborhood Stabilization Program. HUD's NSP technical assistance grants are helping NSP recipients to implement sound underwriting, management, and fiscal controls; measure outcomes in the use of public funds; build the capacity of public-private partnerships; develop strategies to serve low-income households; incorporate energy efficiency into NSP programs; provide support, and training on the operation of "land banks"; and train NSP recipients on HUD program rules and financial management requirements
The additional $2 billion in NSP grants being awarded today will build on the work being done now to help state and local governments and non-profit developers collaborate 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 create "land banks" to assemble, temporarily manage, and dispose of foreclosed homes.
The Neighborhood Stabilization Program will also help to prevent future foreclosures by requiring housing counseling
for families receiving homebuyer assistance funds through NSP. In addition, it will protect homebuyers by requiring grantees to ensure that new homebuyers under this program obtain a mortgage from a lender who agrees to comply with sound lending practices.
Secretary Donovan and HUD are committed to providing the highest level of transparency possible as Recovery Act funds are spent quickly and efficiently. It is crucial 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.