Neighborhood Stabilization Program Update

The NSP is designed similarly to the VT Community Development Program, but with a little bit more flexibility. Towns will be able to apply for funds to purchase foreclosed housing units, blighted units, or vacant units that are in foreclosure, but not yet foreclosed. There will be funds for administration of the grant and for writing the grant application. Grant applications won’t be available until February 2009 which is when the Department of Housing and Community Affairs expects to have a grant agreement from HUD. There will be 3 pieces to this $19.6 million grant: $8 million for VHFA to expand on their housing ownership program; $4.82 million for municipal programs to purchase, rehabilitate where needed, and sell foreclosed housing units both single family and multiple units; and $4.82 million for project specific programs whereby for-profit and not-for-profit entities can apply for up to $1 million to purchase, rehab, and sell foreclosed housing units of 4 units or more per structure. The NSP program requires a quick turn around; funds must be obligated in 18 months (August 2010). However, it should be noted that these funds are NOT for foreclosure prevention, but only for housing already foreclosed upon. The eligible beneficiaries must be of low, moderate, or middle income (no more than 120% of median area income) and are the families moving in; not the families moving out because of the foreclosure. As more news develops, we will keep you posted!