January 14, 2010
HUD SECRETARY DONOVAN ANNOUNCES $4.6 MILLION IN RECOVERY ACT GRANTS TO STABLIZE NEIGHBORHOODS, REBUILD ECONOMIES IN VIRGINIA
Neighborhood stabilization grants to neighborhoods hard hit by the housing crisis
RICHMOND - U.S. Housing and Urban Development Secretary Shaun Donovan today announced that HUD is awarding $4.6 million in Recovery Act funding to the Community Builders, Inc. 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.
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."
Community Builders, Inc. has been awarded $4,687,500 in NSP2 funds. These funds will be used in targeted areas across 15 states including some of the 21 census tracts in Virginia with the highest single family foreclosure rates
in the Tidewater, Northern Virginia and Richmond metropolitan areas. The selected census tracts will address a
crisis in multifamily rental 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 3 year time frame, Community Builders proposed the creation of a minimum of 1,300 units of affordable housing, with at least 50 percent for households whose income is at or below 50 percent of area median income and the remain 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.
For instance in East Chicago, IN, Community Builder's will work with the local housing authority and a non-profit, Hispanic Housing Development Corporation, to develop 75 rental townhouses for families under 60 percent of area median income , with half targeted to family's under 50 percent area median income and around 15 percent for
public housing families.
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.
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 www.hud.gov and espanol.hud.gov.