|HUD No. 11-277
November 28, 2011
HUD SECRETARY TOURS OLNEYVILLE AND DISCUSSES NEW HOUSING REFINANCE PLAN AND NEIGHBORHOOD STABILIZATION EFFORTS IN RHODE ISLAND
PROVIDENCE - Today, U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan toured four Neighborhood Stabilization Program (NSP) properties on Hyat and Joslin Streets in the Olneyville neighborhood of Providence, RI. Secretary Donovan was joined on the tour by U.S. Senators Jack Reed and Sheldon Whitehouse, Congressmen Jim Langevin and David Cicilline, as well as Providence Mayor Angel Taveras. The tour was aimed at highlighting the success of neighborhood stabilization efforts as well as demonstrating how the American Jobs Act and Project Rebuild can help to revitalize neighborhoods, create jobs, and grow local economies throughout the Providence region. Additionally, the touring delegation discussed the new housing refinancing plan, which will provide a lifeline to many underwater borrowers and strengthen the U.S. housing market.
"Thanks to the City of Providence, the Olneyville Housing Corporation, the Neighborhood Stabilization Program and the vision of Rhode Island's congressional delegation, Olneyville is now well on its way to a successful revitalization," said HUD Secretary Shaun Donovan. "Because we can't wait for Congress to act the President recently announced new refinancing options to help underwater borrowers in Rhode Island. But now Congress must step up and pass the American Jobs Act to help rebuild neighborhoods and create jobs in Rhode Island and across the country."
Four weeks ago the Federal Housing Finance Agency (FHFA) announced a set of steps which will help responsible borrowers with little or no equity in their homes take advantage of today's low mortgage rates. The FHFA removed caps for deeply underwater borrowers and cut costs and eliminated refinancing fees. That means more homeowners will have the ability to refinance and save hundreds of dollars each month. Additionally, those who are looking to refinance through this program will finally find competition for their business from other lenders, because the FHFA has removed key frictions that have made lenders reticent to offer new refinancing to underwater borrowers. This will mean better rates and lower costs for borrowers. FHFA also extended the date for homeowners to take advantage of this program through 2013.
"We can do more to help Rhode Island families and improve the housing market. There are too many Americans who have done all the right things - paid their bills on time and are current on their mortgage - but are still stuck in a high interest mortgage because home price declines have made them ineligible for refinancing. The new housing refinance plan includes a series of steps which will help responsible borrowers take advantage of today's record low mortgage rates," Secretary Donovan added. "These new steps will save underwater homeowners thousands of dollars each year, and it will not take an act of Congress. However, there is more work to do by passing the American Jobs Act which includes Project Rebuild, a program which helps put construction workers to work rehabilitating vacant or abandoned homes and businesses. Project Rebuild is an important piece toward stregenthing the housing market and rebuilding our economy."
Recent HUD statistics have shown that communities with neighborhood stabilization investments have seen 67 percent better home sale price changes, 73 percent saw better vacancy rate improvements, and 47 percent saw better home sale and vacancy rate improvements, as compared to similar communities without neighborhood stabilization improvements.
"I am pleased to have Secretary Donovan back in Rhode Island so he can see firsthand what we have accomplished with neighborhood stabilization funding and what more the state could achieve with additional federal support," said U.S. Senator Jack Reed (D-RI), a senior member of the Banking, Housing, and Urban Affairs Committee.
"These homes tell the story of this neighborhood's hard times, and its fight for renewal. I applaud Secretary Donovan and the Administration for directing resources to the heart of the housing crisis. We need programs like Project Rebuild to help keep communities like Olneyville moving in the right direction," said U.S. Senator Sheldon Whitehouse (D-RI).
"Our economy will not fully turn around unless we stabilize our housing market and Project Rebuild takes an important step toward that goal through partnerships with private organizations, lowering the demand for stressed government resources," said U.S. Congressman Jim Langevin (D-RI). "As the success of the Neighborhood Stabilization Program in Rhode Island has proven, we must support efforts that get our most vulnerable families into stable living situations and reduce blighted neighborhoods, while putting construction workers back on the job."
"With so many Rhode Islanders and Americans struggling to make ends meet, we do not have a moment to lose. Project Rebuild will help to put Rhode Islanders back to work now making vital repairs and renovations to our communities. We need to invest in rebuilding in our communities now to create jobs and grow our economy," said U.S. Congressman David Cicilline (D-RI) who is an original co-sponsor of the Project Rebuild Act of 2011.
The State of Rhode Island has received over $26 million in previous neighborhood stabilization efforts and could receive up to $33 million in Project Rebuild funding.
If approved by Congress, Project Rebuild would invest $15 billion in proven strategies that leverage private capital and expertise to rehabilitate hundreds of thousands of properties in communities across the country. Building on the successful ideas developed during the implementation of the Neighborhood Stabilization Project (NSP), Project Rebuild would include the following innovative ideas:
- Allow for the revitalization of commercial properties
- Include For-Profit Entities to Gain Expertise, Leverage Federal Dollars and Speed Program Implementation
- Increase Support for "Land Banking"
- Create Jobs Maintaining Properties and Avoid Community Blight
Project Rebuild will create nearly 200,000 jobs nationwide and is fundamentally an investment not just in hard hit places but also in the families who live there – the millions of homeowners who have seen their property values decline through no fault of their own, just for being near a foreclosed property. Its inclusion in the American Jobs Act reflects President Obama's belief that rebuilding neighborhoods is essential to rebuilding our economy.
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 http://espanol.hud.gov. You can also follow HUD on twitter @HUDgov, on facebook at www.facebook.com/HUD, or sign up for news alerts on HUD's News Listserv.