HUD Archives: News Releases

HUD No. 10-09-08
Rhonda Siciliano
(617) 994-8355
For Release
September 8, 2010

Third round of NSP grants to build on efforts to confront abandonment and blight

WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today awarded an additional $6,309,231 million in funding to Rhode Island communities struggling to reverse the effects of the foreclosure crisis. The grants announced today represent a third round of funding through HUD's Neighborhood Stabilization Program (NSP) and will provide targeted emergency assistance to help local communities in Rhode Island acquire, redevelop
or demolish foreclosed properties. (See below for a complete list of Rhode Island funding)

"These grants will build on local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods," said Donovan. "We wanted to make certain that we targeted these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight. This investment will reduce blight, bolster neighboring home values, create jobs and produce affordable housing."

"Putting people to work, saving buildings, creating housing and stabilizing neighborhoodsis what this program is all about," said Richard A. Walega, HUD New England Regional Administrator. "HUD will work each and every day to help workers, families and communities make sure this funding has a meaningful impact."

"Rhode Island families have felt the effects of the national housing crisis harder than most and that is why I ensured that Rhode Island would receive at least $5 million in aide in this third installment of Neighborhood Stabilization Program (NSP) funding. As a result, we're announcing today that Rhode Island has been awarded a total of $6.3 million in this NSP funding round, which, including the $19.6 million in NSP funds that Rhode Island has already
received and committed, will continue to help address the effects of this crisis by putting abandoned and foreclosed properties on a path towards rehabilitation and stabilization," said U.S. Senator Jack Reed, a senior member of the Banking, Housing and Urban Affairs Committee.

The funding announced today is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
To date, there have been two other rounds of NSP funding: the Housing and Economic Recovery Act of 2008
(HERA) appropriated $3.92 billion and the American Recovery and Reinvestment Act of 2009 (Recovery Act) appropriated an additional $2 billion. Like those earlier rounds of NSP grants, these targeted funds will be used to purchase foreclosed homes at a discount and to rehabilitate or redevelop them in order to respond to rising foreclosures, abandoned homes, and falling home values. Today, 95 cents of every dollar from the first round of NSP funding is obligated – and is in use by communities, buying up and renovating homes, and creating jobs.

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. HUD will issue an NSP3 guidance notice in the next few weeks to assist grantees in designing their programs and applying for funds.

NSP 3 will take full advantage of the historic First Look partnership Secretary Donovan announced with the National Community Stabilization Trust last week. First Look gives NSP grantees an exclusive 12-14 day window to evaluate and bid on properties before others can do so. By giving every NSP grantee the first crack at buying foreclosed and abandoned properties in these targeted neighborhoods, First Look will maximize the impact of NSP dollars in the hardest-hit neighborhoods – making it more likely the properties communities want to buy are strategically chosen
and cutting in half the traditional 75-to-85 day process it takes to re-sell foreclosed properties.

NSP also seeks to prevent future foreclosures by requiring housing counseling for families receiving homebuyer assistance. HUD seeks to protect future homebuyers by requiring States and local grantees to ensure that new homebuyers under NSP receive homeownership counseling and obtain a mortgage loan from a lender who agrees to comply with sound lending practices.

"The Neighborhood Stabilization Program has played a critical role in transforming Rhode Island's foreclosed and
vacant properties into safe, healthy homes that working families can afford," said Richard Godfrey, Executive
Director of Rhode Island Housing. "This new round of NSP funding will help us continue to bring abandoned buildings back to productive use, neighborhoods back to lifeand putRhode Islandersback to work."

In determining the allocations announced today, HUD, as it did with NSP1, followed key indicators for the
distribution formula outlined by Congress. HUD is using the latest data to implement the Congressional formula.
The formula weighs several factors to match funding to need in the 20 percent most distressed neighborhoods as determined based on the number and percentage of home foreclosures, the number and percentage of homes
financed by a subprime mortgage related loan, and the number and percentage of homes in delinquency. To
estimate the level of need down to the neighborhood level, HUD uses a model that takes into account causes
of foreclosures and delinquencies, which include housing price declines from peak levels, and increases in unemployment, and rate of high cost and highly leveraged loans. HUD also considers vacancy problems in neighborhoods with severe foreclosure related problems.

In addition to a third round of NSP funding, Dodd-Frank Wall Street Reform and Consumer Protection Act creates
a $1 billion Emergency Homeowners Loan Program to be administered by HUD. This loan program will provide up to
24 months in mortgage assistance to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition. HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.


HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at and


State of Rhode Island
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Content Archived: April 30, 2012