Neighborhood Stabilization Program (NSP)

Program Overview

The Neighborhood Stabilization Program (NSP) is a component of the Community Development Block Grant (CDBG) program of the U.S. Department of Housing and Urban Development (HUD). The CDBG program provides resources to address community development needs such as decent housing, a suitable living environment, and economic opportunities for low- and moderate-income persons (i.e. their income may not exceed 50 percent or 80 percent respectively, of the area median income). Created by the first recovery law passed during the Bush Administration, the Housing and Economic Recovery Act of 2008 (HERA), the purpose of NSP is to stabilize communities that have suffered from foreclosures and abandonment. NSP funds are distributed to nonprofits as well as state and local governments to buy and renovate foreclosures, and to sell or rent homes to low- and moderate-income households. Recipients of NSP grants must use at least 25 percent of funds for the purchase and redevelopment of abandoned or foreclosed homes or residential properties, which then must be to house low- and moderate-income persons.

There are three categories of NSP funds:

1) NSP1

NSP1 funds are allocated by HUD under HERA. HUD has allocated $3.92 billion to 309 grantees, including 55 states and territories and 254 selected local governments.

2) NSP2

NSP2 grants are funds allocated by the American Recovery and Reinvestment Act (ARRA). HUD allocated $1.93 billion on a competitive basis to states, local governments, and non-profit organizations.


NSP2 grants can be used for:

1)  Establishing financing mechanisms for purchase of foreclosed homes;

2)  Purchase and rehabilitation of abandoned or foreclosed homes

3)  Land banking of foreclosed homes, which is the process where an entity purchases land and holds it until it is profitable to sell to others;

4)  Demolition of blighted structures; and

5)  Redevelopment of vacant or demolished property

3)  NSP –TA

NSP-TA are HUD funds allocated on a competitive basis to technical assistance providers supporting NSP projects. HUD has allocated $50 million in NSP-TA funds to NSP1 and NSP2 grantees.

New York State Context

NSP1

In 2009, the State of New York received $59 million in NSP1 funds. These funds went to 29 programs in New York.

New York City

New York City Real Estate Owned Program $3,001,213
Housing Partnership Development Corp. $3,000,000
Cypress Hills Local Development Corp. $1,580,000
Neighborhood Housing Services CDC of NYC $1,400,000

Buffalo

City of Buffalo and Town of Cheektowaga $2,635,019

HomeFront Inc. $849,000

People United for Sustainable Housing (PUSH) $645,325

Orange County

Housing Partnership Development Corp. $2,370,286

NSP2

The funds for the NSP2 program under ARRA have yet to be distributed. Recipients of NSP2 funds will be notified by December 1, 2009. NSP2 funds must be expended within two years from the date they become available for all grantees.

Discussion Questions

1) Can NSP funds be used to benefit your community? If so, how?

2) Have you seen the NSP funds already distributed benefiting your community?

3) How can we organize around fair distribution and use of NSP funds?

Resources & Contacts

Resources

HUD Neighborhood Stabilization Project Website

http://www.nls.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/

Neighborhood Stabilization Program Mapping Tool

http://www.huduser.org/nspgis/nsp.html

New York Recovery Housing Fact Sheet

http://www.recovery.ny.gov/FactSheets/ARRA-Fact_Sheet_Housing.htm

NSP1 2009 Award List for New York

http://www.nyhomes.org/index.aspx?page=860

Contacts

Call the office of Community Planning and Development if you have any questions about how NSP funds are being distributed in New York State

Community Planning and Development Buffalo Field Office

Field Office Director

Nancy A. Peacock

Lafayette Court

465 Main Street, 5th Floor

Buffalo, NY 14203-1780

(716) 551-5755 ext. 5800