Prepared Remarks of Secretary Shaun Donovan at the Neighborhood Stabilization Program Announcement Event

Home of Aaron Two Crow, Las Vegas, Nevada
Monday, September 10, 2010

Good morning, it's a pleasure to be with you all today. I'd like to thank Congresswoman Berkley and Congresswoman Titus, both of whom know how to fight for Nevada's working families. At a time like this, Nevadans need their brand of leadership in Washington.

I'd also like to thank someone who couldn't be here today, Majority Leader Harry Reid. Leader Reid gives the state of Nevada a powerful voice in the United States Senate. With his leadership and reputation for winning the tough battles, every day Leader Reid delivers for Nevadans.

It's thanks to their combined efforts that I'm here today to announce new funding for the Neighborhood Stabilization Program.

As Nevadans know all too well, foreclosed and vacant homes have a debilitating effect on neighborhoods and often lead to blight, neighborhood decay and reduced property values.

Indeed, Las Vegas is Ground Zero for the housing crisis, with high rates of foreclosures and a 43 percent drop in housing values from 2007 to when the President took office.

That's why HUD provided $6 billion in the first two rounds of Neighborhood Stabilization funding allowing communities to buy and redevelop foreclosed and abandoned homes and residential properties.

Today, 95 cents of every dollar from the first round of NSP funding has been obligated -- and the State of Nevada has performed even better. In the Las Vegas metropolitan area alone, this funding has provided more than $60 million, helping to buy up and renovate homes, and creating jobs.

And it's helping families like Aaron Two Crow's, whose home I just toured. Having recently welcomed a new baby to the family, Aaron and his wife wanted to buy their first home. But it was only because of Neighborhood Stabilization funding and the support and guidance of HUD-approved housing counselors that they actually could buy that home -- one that had been foreclosed upon.

As you can see for yourself, Neighborhood Stabilization funding is not only putting vacant, abandoned properties like this one back into productive use -- it is putting responsible families like Aaron's on a path to sustainable homeownership.

It's helping families, creating jobs and strengthening neighborhoods at the same time.

And more help is on the way. This week, we are putting another $1 billion in the pipeline for a third round of Neighborhood Stabilization funding, passed as part of the Dodd-Frank Wall Street Reform bill in July. Thanks to Harry Reid's remarkable leadership that sent that historic bill to President Obama's desk, NSP3 will provide another $43 million to Nevada -- including nearly $4 million for Henderson, $10.5 million for the City of Las Vegas and more than $20 million for Clark County, the second largest grant in the country.

All told, we expect Neighborhood Stabilization funds will impact 100,000 properties in the nation's hardest-hit markets -- almost 20 percent of vacant and abandoned homes over the last 18 months in NSP-targeted areas, with ripple effects that could have a profound impact on our local, regional and national housing markets alike.

NSP 3 can take full advantage of the historic First Look partnership I announced last week with the National Community Stabilization Trust and the nation's leading financial institutions to help communities across the country purchase vacant properties quickly, at a discount, and before they hit the open market.

By giving NSP grantees an exclusive 12-14 day window to evaluate and bid on properties, First Look will maximize the impact of Neighborhood Stabilization dollars in our hardest-hit neighborhoods.

Instead of working with what could be as many as a dozen financial institutions servicing the mortgages on any given block, communities like Las Vegas will be able to work with all the major servicers and have access to automated, state-of-the-art tools which allow them to know what properties are available and who owns them.

As important as it is, obviously, Neighborhood Stabilization won't help every block wracked by foreclosures. And it is only one tool in our toolbox as we fight the headwinds against the nation's continued economic recovery.

Indeed, with many communities struggling with underwater properties--including nearly three quarters of Las Vegas homes--just this week we made the FHA Short Refinance option available -- to help responsible underwater homeowners in states like Nevada refinance into an FHA-insured mortgage.

But with this new Neighborhood Stabilization funding--made possible by the Dodd-Frank Wall Street Reform bill--and a new commitment to bringing together a greater number of stakeholders with a greater sense of shared responsibility, President Obama and I believe we can tackle tough challenges like foreclosures, blight and unemployment. We can help our communities recover. And we can build back stronger than before.

That is what this funding is about -- and it's why I'm proud to stand with our partners in Nevada announcing it here today. Thank you.

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