HUD No. 09-04
March 19, 2009
HUD APPROVES $52 MILLION IN NEIGHBORHOOD STABILIZATION PLANS FOR KNOXVILLE AND TENNESSEE STATE PROGRAM FOR COMMUNITIES
HARD-HIT BY FORECLOSURE
Funding aimed at neighborhoods facing potential abandonment and blight
NASHVILLE - U.S. Housing and Urban Development Secretary Shaun Donovan today approved plans from Knoxville ($2,735,980) and the Tennessee State Program ($49,360,421) for communities seeking to recover from the effects
of high foreclosures and declining home values. The total amount of funding totals $52,096,401. Funded under HUD's new Neighborhood Stabilization Program (NSP), these communities will shortly begin to target emergency assistance to particular neighborhoods by acquiring and redeveloping foreclosed properties that might otherwise become
sources of abandonment and blight.
HUD's Neighborhood Stabilization Program was created under the Housing and Economic Recovery Act of 2008 and provides nearly $4 billion to every State and certain local communities experiencing particularly high foreclosure problems and risk of property abandonment. The program permits these State and local governments to purchase foreclosed homes at a discount and to rehabilitate or redevelop them in order to respond to rising foreclosures and falling home values.
State and local governments can use their neighborhood stabilization grants to acquire land and property; to
demolish or rehabilitate abandoned properties; and/or to offer downpayment and closing cost assistance to low- to moderate-income homebuyers (household incomes not exceed 120 percent of area 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.
The NSP 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 loan from a lender who agrees to comply with sound lending practices.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet