January 15, 2010
HUD SECRETARY DONOVAN ANNOUNCES RECOVERY ACT GRANT TO STABILIZE NEIGHBORHOODS, REBUILD ECONOMY IN NEW HAVEN
Neighborhood stabilization grants to help communities hard hit by the housing crisis
U.S. Housing and Urban Development Secretary Shaun Donovan today announced that HUD is awarding $231,362
in Recovery Act funding to the Center for Community Self Help for work in New Haven 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
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."
The Center for Community Self-Help has been awarded a total of $11,763,553 in funding, $231,362 of which has been awarded for work in New Haven. These funds will be used in targeted areas across 778 census tracts in the Central Valley and Bay Area of California, Chicago, Los Angeles, New Haven, and Atlanta. The Center for Community Self-Help is taking a unique approach for its use of NSP2 grant to fund loan loss reserves, a financing mechanism, which will provide additional security for repaying various types of financing, which include lease-purchase
mortgages, direct home mortgages, developer credit lines, and mortgages for investor-owned properties for a proposed 560 foreclosed residential properties. These activities will benefit households whose income is at or below 120 percent of area median income, with 25 percent of the funds for households at or below 50 percent of area median income. Providing these permanent financing options in the targeted areas is essential to the continued success of NSP activities already underway to help revitalize the housing market and ensure neighborhood
stabilization in these metropolitan 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.