HUD’s Neighborhood Stabilization Program (NSP) provides grants to every state and certain local communities to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of house values of neighboring homes. The NSP program targets areas in the City and County that are most severely impacted by foreclosures and subprime lending, and in weaker housing markets that are not as readily able to recover without assistance.
On behalf of the City and County of Sacramento, the Sacramento Housing and Redevelopment Agency has received over $40 million in NSP funding under two separate awards, NSP1 and NSP3, as described below. These funds are administered by SHRA.
In July 2008, Congress passed the Housing and Economic Recovery Act of 2008 (HERA) allocating $4 billion for the Neighborhood Stabilization Program (NSP1). Through a formula allocation released by HUD, Sacramento County received a grant of $18.6 million, and the City of Sacramento received a grant of $13.3 million under NSP1.
In early 2009, the implementation of NSP1 was officially launched and several new programs were developed with similar shared goals to:
- Return vacant foreclosed or abandoned residential properties to occupancy as quickly as possible;
- Revitalize neighborhoods through strategic redevelopment, rehabilitation and reuse of vacant properties; and
- Provide affordable homeownership and improved affordable rental opportunities to Sacramento families.
Descriptions of the programs are available by clicking on the list link below.
Vacant Properties Program
Block Acquisition and Rehabilitation Program
Property Recycling Program
In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act provided an additional $1 billion for the Neighborhood Stabilization Program (NSP3). The Act constituted the third round of NSP funding to stabilize neighborhoods whose viability has been and continues to be, damaged by the economic effects of foreclosed and abandoned properties.
HUD prescribed a formula allocation of NSP3 funds based on the number of foreclosures and vacancies in the top 20 percent of U.S. neighborhoods (Census Tracts) with the highest rates of homes financed by subprime mortgages, delinquencies, or foreclosures. Based upon HUD’s formula, the County of Sacramento received an additional $4.95 million, and the City of Sacramento received an additional $3.72 million under NSP3. Like NSP1, SHRA administers NSP3 funds on behalf of the City and County of Sacramento.
NSP3 funds will be used to leverage the existing NSP1 Vacant Properties Program and Property Recycling Program which focus on the rehabilitation and sale or rental of housing units to qualified low- and moderate-income families.
Target Areas - NSP1 and NSP3
Chris Pahule, Assistant Director, Community Development