December 29, 2008
HUD APPROVES NEIGHBORHOOD STABILIZATION PLAN FOR CONNECTICUT COMMUNITIES HARD-HIT BY FORECLOSURE
$25 million in funding aimed at neighborhoods facing potential
abandonment and blight
Today U.S. Housing and Urban Development Secretary Steve Preston approved the State of Connecticut's plan for more than $25 million in funding to recover from the effects of high foreclosures and declining home values. Funded under HUD's new Neighborhood Stabilization Program (NSP), the State will shortly begin to target emergency assistance to communities by acquiring and redeveloping foreclosed properties that might otherwise become sources of abandonment and blight.
"It is critical that we work closely with state and local governments to put this money to work as quickly as possible to help 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 with these communities to make certain these funds are targeted to neighborhoods with the greatest needs."
The State of Connecticut is sub-allocating its funding to seven cities hard hit by foreclosures:
- Bridgeport - $5.5 million
- Waterbury - $3.3 million
- New Haven - $3.0 million
- Stamford - $2.7 million
- Hartford - $2.6 million
- Meriden - $1.7 million
- New Britain - $1.7 million
HUD's Neighborhood Stabilization Program was created under the Housing and Economic Recovery Act of 2008 and provides nearly $4 billion nationwide to every state
and certain local communities experiencing particularly high foreclosure problems and risk of property abandonment. The program permits these state and local
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 grantees to ensure that new homebuyers under this program obtain a mortgage loan from a lender who agrees to comply with sound lending practices.
The State of Connecticut's plan is one of 22 approved today. As state and local governments submit their NSP funding plans, HUD continues to review the plans in an efficient and timely manner.