Friday, September 10, 2010

Indianapolis To Receive $8 Million in Neighborhood Stabilization Plan Funds

The City of Indianapolis will receive $8 million from the third round of Neighborhood Stabilization Plan (NSP) money issued by the U.S. Department of Housing and Urban Development (HUD). The funding is part of a total $1 billion distributed to states around the country announced by HUD Secretary Shaun Donovan. The money will provide targeted emergency assistance to state and local governments to acquire, redevelop or demolish foreclosed properties.

“This funding will build on the original NSP dollars we received in 2008 and further our efforts to create a more livable, sustainable city,” said Mayor Greg Ballard. “As we work to rehabilitate our neighborhoods and improve quality of life throughout all of Indianapolis, these funds are certainly welcomed and will be used in the most efficient way possible to build neighborhoods in which our citizens can be proud to live.”

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 down payment and closing cost assistance to low- to moderate-income homebuyers (household incomes not to 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. Indianapolis established its land bank in 2007.

"We have so many communities making great strides, but they still face significant hurdles in tackling foreclosed properties, which lower the quality of life and become magnets for crime and blight,” said Congressman AndrĂ© Carson. “This funding will be another much-needed shot in the arm for Indianapolis and other communities struggling with high rates of foreclosure."

HUD will issue a guidance notice in the next few weeks to assist grantees in designing their programs and applying for funds. This will assist the Community Economic Development Division in determining how to spend the funds.

The NSP funding 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) provided $3.92 billion, and the American Recovery and Reinvestment Act of 2009 (Recovery Act) appropriated an additional $2 billion. Today, 95 cents of every dollar from the first round of NSP funding is obligated and in use by communities purchasing and renovating homes and creating jobs.

NSP 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.

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