Kids, you noticing all this plight?
Today the Department of Housing and Urban Development (HUD) announced it will disburse more funding to hard-hit areas through the Neighborhood Stabilization Program. The broad goal of the program is to prevent foreclosure and stabilize property values. The amount to be distributed is still to be announced, and will be doled out over the next 18 months.
The Neighborhood Stabilization Program is designed to provide relief to areas that are dealing with high rates of foreclosure. The money is disbursed through grants to municipalities, who then devise and submit a plan detailing how they will use the money. The program is supposed to engender innovative ways to deal with foreclosures.
Some of the uses HUD suggests for the funds include:
- land and property acquisition
- to offer down payment or closing cost assistance to low and moderate income home buyers
- to demolish or rehabilitate abandoned properties
- to create “land banks” to assemble, manage, and dispose of vacant land to encourage re-use or stabilization of urban property
HUD has already distributed $6 billion through two rounds of funding in 2008 and earlier in 2010. The funds will be allocated based upon the rate of distressed properties, as well as the volume of mortgage defaults and delinquencies.
The initial round of funding sent $20 million to each state to explore possible solutions to the foreclosure crisis. When it became apparent some areas were in need of more help than others, the funds were redistributed.
About the programs, HUD Secretary Shaun Donovan commented: “Through HUD’s recapture process, the Administration is working to use the resources we have already received and build on the success and lessons from NSP1 and NSP2, ideally with additional funding for a third round, to really target the recovery in hard hit areas directly. The recapture process would provide additional resources to areas based on their foreclosure and delinquency rates, vacancy problems and unemployment. We also want to go a step further by providing funds to help homeowners avoid foreclosure.”
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