January 15, 2010
HUD SECRETARY DONOVAN ANNOUNCES $47.9 MILLION IN RECOVERY ACT GRANTS TO STABILIZE NEIGHBORHOODS, REBUILD ECONOMIES IN MASSACHUSETTS
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 $47.9 million
in Recovery Act funding in three grants in Massachusetts 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 creating jobs. (Please see attachment for grant awards and summaries.)
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 foreclosure 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 City of Boston has been awarded $13,610,343;
- The Massachusetts Housing Investment Corporation has been awarded $21,882,940;
- Community Builders, Inc. has been awarded $12.5 million.
The Neighborhood Stabilization Program was created to address the foreclosure crisis, create jobs, and grow local economies by providing communities with the resources to purchase and rehabilitate foreclosed 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 rising foreclosures and falling home values.
In addition, on August 26, 2009, HUD awarded $50 million in technical assistance grants to help grantees more effectively manage the inventory of foreclosed homes they purchase undertheNeighborhood Stabilization Program. HUD's NSP technical assistance grants are helping NSP recipients to implement sound underwriting, management,
and fiscal controls; measure outcomes created by 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.
Neighborhood Stabilization Grants - Massachusetts
- The City of Boston has been awarded $13,610,343 in NSP2 funds to be used in targeted areas across 42 census tracts with high foreclosure rates and a high concentration of real estate owned properties. The targeted areas have suffered from a decline in property values resulting from overvaluation of property and foreclosures resulting from high cost loans. The awarded funds will be used to build on a neighborhood stabilization strategy in place since early 2007. The city proposed to acquire 496 real estate owned properties over three years and provide homebuyer assistance, counseling, and education programs. After acquiring these real estate owned properties, the city will make them available to diverse populations including middle-income, moderate and low-income, and the homeless while maintaining a requirement of using the funds for households whose income is at or below 120 percent of area median income, with 25 percent of funds to be used for households at or below 50 to 56 percent median income. The goals of these activities are to stabilize existing homeowners in the area, address the market-depressing influence of derelict REO properties, and simulate demand for housing in high-foreclosure areas by offering financial and technical support to homebuyers. The use of these funds, and the leveraging of $14,300,000 in other funds, will lead to greater market strength and enhanced neighborhood stabilization in an accelerated timeframe.
- The Massachusetts Housing Investment Corporation in a consortium agreement with Massachusetts Housing Partnership and Commonwealth of Massachusetts Department of Housing and Community Development has been awarded $21,882,940 in NSP2 funds. These funds will be used in targeted areas across 142 census tracts in economically hard hit urban communities where foreclosure activity and vacancies are high and homeownership rates are below the state average. The Consortium proposed to use awarded funds in part to add to a Neighborhood Stabilization Loan Fund to provide revolving acquisition/construction loans to approved entities for the acquisition and rehabilitation of foreclosed and abandoned properties that will then be rented or sold. The proposed use of funds also includes restoring 210 properties and returning 620 units to productive use. Additionally, the Consortium proposed to create a homebuyer incentive program where 360 homebuyers will receive interest subsidies and/or loan loss reserves, 240 will receive down payment assistance, and 180 will receive rehabilitation assistance. This program will lead to the purchase and improvement of foreclosed properties by individual homebuyers and will impact a proposed 600 units. All of these activities will benefit households whose income is at or below 120 percent of area median income, with 25 percent of the funds benefiting households at or below 50 percent of area median income. The Consortium will leverage $35 million in other funds to help ensure neighborhood stabilization.
- Community Builders, Inc. has been awarded $78,617,631 nationwide in NSP2 funds. In Massachusetts, the grant award is $12.5 million. These funds will be used in targeted areas across 15 states and nine census tracts to address a crisis in multifamily housing where the location and proportion of rental housing relative to the single-family inventory is critical to the viability of the real estate market. Community Builders proposed to acquire and rehabilitate or redevelop multifamily properties that are foreclosed, blighted, or vacant. Their strategy will build on existing stabilization efforts and continue after the NSP2 program. Within an allotted three-year time frame, Community Builders proposed the creation of a minimum of 1,300 units of affordable housing, with at least half for households whose income is at or below 50 percent of area median income and the remainder for households at or below 120 percent of area median income. Community Builders is taking a unique approach by using their NSP2 funds for the development of affordable multifamily housing to rent as apartments, townhomes, and residential complexes with families of mixed incomes.
HUD is the nation's housing agency committed to sustaining homeownership; 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 ad enforces the nation's
fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.