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Community Development Block Grant Program

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Neighborhood Stabilization Program

Frequently Asked Questions

1. What is the Neighborhood Stabilization Program? The Neighborhood Stabilization Program provides State and local governments with a source of funding to help them respond to rising foreclosures and declining property values.
2. How did the Neighborhood Stabilization Program come about? On July 30, 2008, President Bush signed into law the Housing and Economic Recovery Act of 2008 to address the severe housing crisis. Title III of the Act appropriates $3.92 billion of grant funds under the Neighborhood Stabilization Program for states and local governments to purchase and redevelop abandoned or foreclosed properties. The Housing and Economic Recovery Act of 2008 directed the United States Department of Housing and Urban Development to target funding to areas with the greatest needs based on the extent of foreclosures, subprime mortgages, and mortgage delinquencies and defaults. The Federal Notice, which was released on September 30th, provides information regarding method of allocation, program requirements, application procedures, and waivers granted.
3. How were Neighborhood Stabilization Program funds allocated? More than 250 local cities and counties received grants as well as all 50 states, including Puerto Rico and the District of Columbia, with each state receiving at least $19.6 million. The State of Florida has been allocated $541 million, which includes $91,141,478 being awarded to the Department of Community Affairs, under the State's Community Development Block Grant program, and approximately $450 million being allocated directly to 48 local governments. For a complete breakdown of Florida's funds, please visit the United States Department of Housing and Urban Development's website.
4. How is the money to be spent? States and local governments (Neighborhood Stabilization Program grantees) may use funding to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight. Eligible uses for the funds include:
   • Buying foreclosed homes
   • Buying land and property
   • Demolishing or rehabilitating abandoned properties
   • Offering downpayment and closing cost assistance to low- to moderate-income homebuyers
   • Creating "land banks" to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging re-use or redevelopment of property
5. How long does the State and local communities have to spend this money? Congress was very clear that there is an urgency to deal with a national housing crisis and has provided under the Act that the funds be put to work quickly. Grantees have 18 months to obligate these funds, and four years to spend them. In some areas, this level of federal funding will be unprecedented, so the United States Department of Housing and Urban Development will help these communities implement their programs.
6. What will happen if grantees don't obligate their funds within 18 months? The United States Department of Housing and Urban Development will recapture the funds and return the money to the taxpayers.
7. What does the Department of Community Affairs have to do to comply with the Neighborhood Stabilization Program guidelines? In order to receive the grant allocation, the Department of Community Affairs developed a substantial amendment to their action plan. The amendment was submitted to the United States Department of Housing and Urban Development for approval on December 1, 2008.
8. Will this be like the Community Development Block Grant Disaster Recovery Program? No. The Federal Register Notice emphasizes that the authority for this funding is "substantially and significantly more limited from that generally provided with disaster recovery Community Development Block Grant supplemental appropriations". Therefore, the United States Department of Housing and Urban Development will have very little authority to waive any requirements.

Additional Information

Community Development Grant Program Staff Contacts