January 15, 2009
HUD APPROVES NEIGHBORHOOD STABILIZATION PLAN FOR MASSACHUSETTS COMMUNITIES HARD-HIT BY FORECLOSURE
$43.4 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 Massachusetts' plan
for more than $43.4 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 funding is part of $54.8 million awarded in Massachusetts. In addition to the $43.4 million awarded to the State
of Massachusetts, HUD will provide direct funding to the Cities of Boston, Brockton, Springfield and Worcester.
Those plans are currently under review, but as the state's highest need communities, those cities can also apply
to the state for additional funding. According to the State's plan, 35 other communities are targeted for assistance: Fitchburg, Haverhill, Lawrence, Lowell, Lynn, New Bedford, Framingham, Barnstable, Plymouth, Marlborough, Revere, Everett, Methuen, Weymouth, Chicopee, Leominster, Quincy, Milford, Randolph, Attleboro, Yarmouth, Wareham, Salem, Billerica, Fall River, Saugus, Dracut, Somerville, Chelsea, Peabody, Taunton, Holyoke, Stoughton, Falmouth, and Marshfield.
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 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 program 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.
NOTE TO REPORTERS: For detailed information, view the State of Massachusetts' plan (http://www.mass.gov/Ehed/docs/dhcd/cd/nsp/nspplan.doc)