John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... U.S. Housing and Urban Development Secretary Shaun Donovan today announced that HUD is awarding $42.4 million in Recovery Act funding to two Denver organizations, under HUD’s Neighborhood Stabilization Program (NSP).
The NSP grants announced today are part of $2 billion awarded nationwide to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes while creating jobs. The Denver Office of Economic Development will receive $18. 9 million and the Chicanos Por La Causa, Inc., is funded $23.2 million.
Funded through the American Recovery and Reinvestment Act of 2009, this round of NSP grants is being awarded competitively to applicants that developed the most innovative ideas to address the impact the foreclosure crisis has had on local communities, while demonstrating that they have the capacity to be responsible stewards of taxpayer dollars.
“Vacant homes have a debilitating effect on neighborhoods and often lead to reduced property values, blight, and neighborhood decay,” said Donovan. “This additional $2 billion in Recovery Act funding will help stabilize hard hit communities by turning vacant homes from eyesores into community assets. The Neighborhood Stabilization program is a key part of the Obama Administration’s comprehensive approach to address the national housing and economic crisis.”
The Denver Office of Economic Development’s $18.9 million award is to be used in targeted areas across 20 census tracts to address foreclosures and vacancies causing destabilization.
Denver plans to return 325 abandoned or foreclosed properties back to productive use to create affordable housing for households whose income does not exceed 120 percent of area median income, with 25 percent of funds directed towards households at or below 50 percent of area median income.
Denver will acquire and rehabilitate 245 abandoned or foreclosed homes; bank 15 properties; demolish 50 vacant properties; and redevelop 35 vacant or demolished properties as housing. Additionally, 195 households will receive financing mechanisms in the form of loan assistance to ensure that low- and moderate-income households will be able to purchase affordable homes near public transit lines.
The goal of these activities is to increase sales of residential properties and raise median values in targeted neighborhoods while supporting local business development, creating jobs, and ensuring better public transit. The Consortium will also use $4,450,000 in other funds to ensure neighborhood stabilization.
Chicanos Por la Causa in a consortium agreement with Affordable Homes of South Texas, Community Development Corporation of Brownsville, El Paso HOAP, Tierra del Sol Housing Development Corporation, YES Housing, Inc., CHISPA, Inc., New Economics for Women, Colorado Rural Housing Development Corporation, Del Norte/Northeast Denver Housing Center, Mi Casa, Inc., Norris Square Civic Association, and The Resurrection Project has been awarded more than $137 3 in NSP2 funds.
These funds will be used in targeted areas across 332 census tracts in eight States, including Colorado, to address foreclosure and abandonment in the housing market and to create affordable housing for Latino communities.
The consortium proposed to use the awarded funds to demolish 165 blighted properties, land bank 203 foreclosed homes, and produce 1,998 affordable housing units through the purchase and rehabilitation of foreclosed or abandoned homes, financing mechanisms, and redevelopment of vacant or abandoned properties. These activities will benefit households whose income is at or below 120 percent of area median income, with 25 percent of the funds for households at or below 50 percent of area median income. These funds, and the leveraging of $12,012,000 in other funds, will lead to neighborhood stabilization by improving the housing market through the creation of affordable housing in the targeted communities.
The Neighborhood Stabilization Program was created to address the foreclosure crisis, create jobs, and grow local economies by providing communities with the resources to purchase and rehabilitate foreclosed homes and convert them to affordable housing.
Last year, HUD awarded nearly $4 billion in NSP formula funds to over 300 grantees nationwide to help state and local governments respond to rising foreclosures and falling home values.
In addition, on August 26, 2009, HUD awarded $50 million in technical assistance grants to help grantees more effectively manage the inventory of foreclosed homes they purchase under the Neighborhood Stabilization Program. HUD’s NSP technical assistance grants are helping NSP recipients to implement sound underwriting, management, and fiscal controls; measure outcomes created by public funds; build the capacity of public-private partnerships; develop strategies to serve low-income households; incorporate energy efficiency into NSP programs; provide support, and training on the operation of ‘land banks’; and train NSP recipients on HUD program rules and financial management requirements.
The additional $2 billion in NSP grants being awarded today will build on the work being done now to help state and local governments and non-profit developers collaborate to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer downpayment and closing cost assistance to low- to middle-income home buyers. Grantees can also create “land banks” to assemble, temporarily manage, and dispose of foreclosed homes.
The Neighborhood Stabilization Program will also help to prevent future foreclosures by requiring housing counseling for families receiving homebuyer assistance funds through NSP. In addition, it will protect homebuyers by requiring grantees to ensure that new homebuyers under this program obtain a mortgage from a lender who agrees to comply with sound lending practices.
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
