HUD APPROVES L.A.'s $32.8 MILLION NEIGHBORHOOD STABILIZATION
PLAN
Funding aimed at neighborhoods hard-hit by foreclosure

WASHINGTON - U.S. Housing and Urban Development Secretary Steve Preston today approved a plan from the City
of Los Angeles seeking to recover from the effects of high foreclosures and declining home values. Funded under HUD's new Neighborhood Stabilization Program (NSP), Los Angeles will target $32.8 million in emergency assistance
to particular neighborhoods by acquiring and redeveloping foreclosed properties that might otherwise become
sources of abandonment and blight.

"It is critical that we work closely with the City of Los Angeles to put this money to work as quickly as possible to help these communities recover from the effects of foreclosure and declining property values," said Preston. "Stabilizing neighborhoods is what this program is all about. HUD will continue to work closely local leaders to make certain these funds are targeted to neighborhoods with the greatest needs."

"As Congress developed our response to the subprime mortgage crisis and took steps to strengthen the housing market, I emphasized the importance of neighborhood stabilization. I have seen the consequences of clusters of foreclosed properties driving down home values, increasing crime and adding to blight in affected neighborhoods, so
I fought hard to make sure the legislation we passed included neighborhood stabilization funding. I have spoken with Mercedes Marquez, General Manager of the Los Angeles Housing Department, and I believe she has developed an excellent plan for utilizing NSP funds to help our communities," said Congresswoman Maxine Waters (CA-35), who chairs the Financial Services Subcommittee on Housing and Community Opportunity.

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 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 loan from a lender who agrees to comply with sound lending practices.

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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 and espanol.hud.gov.