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Neighborhood Stabilization Program

Neighborhood Stabilization Program. NACEDA Webinar for Members Federal Update Rachel Audi November 12, 2009. HUD Neighborhood Stabilization Program. NSP1 Created 2008 - Housing Economic Recovery Act $4 billion grants to States and Locals for purchase & rehab, downpayment assistance NSP2

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Neighborhood Stabilization Program

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  1. Neighborhood Stabilization Program NACEDA Webinar for Members Federal Update Rachel Audi November 12, 2009

  2. HUD Neighborhood Stabilization Program • NSP1 • Created 2008 - Housing Economic Recovery Act • $4 billion grants to States and Locals for purchase & rehab, downpayment assistance • NSP2 • Created 2009 - ARRA • $2 billion grants to States, Locals, Nonprofits or Consortia of Nonprofits • NSP Task Force advocacy: • Extension of the 18 months for the NSP1 funds

  3. U.S. Foreclosure Crisis • 925,000 borrowers went into foreclosure during Q3 of 2009, 29% increase from Q3 2008 • Between July 2007 and August 2009 there were more than 7 million foreclosure filings, out of a total of 111 million households in the United States • 1.5 million loans have been lost to foreclosure this year, with the highest foreclosure rates in Nevada, Arizona and Florida • 2 million more will lose homes in 2009 • As of May, 29% of Florida housing loans had been foreclosed • 13 million homes are projected to foreclose in the next 5 years • Only 17 percent of eligible borrowers have had their loans modified and monthly payments cut. • To-date, delinquent loans > loan modifications According to the RealtyTrac Q1 2009 U.S. Foreclosure Market Reportforf9

  4. Early successes in the Obama Administration’s stabilization efforts • Goal of 500,000 trial loan modifications by November 1, set in July, pushed servicers to speed up program implementation • Goal met in early October: almost a month ahead of schedule • Trial modifications are now being issued faster than new homeowners are becoming eligible • The Obama Administration is pushing for more assistance for struggling homeowners • Senior Treasury and HUD officials met with servicers, to find ways to improve efficient loan modification service

  5. Legislation: Housing Preservation and Tenant Protection Act • To be introduced by Barney Frank (D-MA), Chair • Covers nearly 2 million affordable subsidized housing apartments • Extend enhanced vouchers to all HUD-insured properties • Protections for • Residents facing conversion • Projects facing foreclosure • Expected to be introduced in December 2009

  6. Congressional Legislation: Main Street TARP Act, H.R. 3766 • Introduced by Barney Frank (D-MA), Chair • $1 billion TARP funds for Housing Trust Fund • Goal: 1.5 million homes in 10 years • Dedicated funds (not subject to appropriations) • For extremely low- and very low-income households • $2 billion TARP funds for owner-occupants • At least 3 months behind in mortgage payment • Have lost employment or underemployed • Have ability to make future mortgage payments • Must repay loan/credit/advance

  7. Legislation: Preserving Homes and Communities Act, S. 1731 • Introduced by Senator Jack Reed (D-RI) • Provides $2 billion for Housing Trust Fund • Authorizes $6.4 billion to states to help prevent foreclosure for owners who • In financial hardship beyond control • Able to make mortgage payments in 15 months • Provides foreclosure protections • Requires lenders to disclose to owner all modification remedies to prevent foreclosure • Prohibits unnecessary mod & foreclosure fees • Creates grant program for foreclosure mediation • Requires HUD implement plan to predict foreclosure trends

  8. Legislation: Community Regeneration, Sustainability, and Innovation Act, H.R. 932 • Introduced by Tim Ryan (D-OH), Senator Charles Schumer (D-NY) • Creates demonstration grants for local governments in areas • With 20% population decline since 1970 • Vacated industrial towns, facilities, housing • Funding for innovative renewal: • Creation of land banks • Recovered building materials reuse • Removal of abandoned properties • Creation of open space and infrastructure • Land use, brownfield, and strategic planning

  9. NSP Challenges • Foreclosure environment • Homes in foreclosure process: 2.5 million • 750,000 held by banks • Foreclosed homes sold by 2012: 4 million* • HUD disbursement of NSP funding • Only 13.8% of funds obligated to-date • All purchases must be made by fall 2010 • HUD Collaboration before disbursing • Contract with banks and lenders • States and cities: report to HUD how funds will be spent • Slow funds slow states, cities *Source: Mark Zandi, Moody’s Economy.com

  10. NSP Challenges • Investors & Locals • Investors purchasing homes faster than non-profits • State and local governments • Finding funds beyond NSP for rehab • Plans to reclaim streets, blocks slowed by critical collaboration with community, banks, owners • State & local challenges: • Acquiring homes from banks at 1% discount to appraised value • 25% of funds must help very low-income

  11. Status Report • NSP1 Comments • HUD • Federal Reserve • HUD review of NSP2 grant applications • Reviewing 404 applications • $13 billion in requests • $2 billion in funds available • NSP2 Timeframe • HUD anticipates review NSP2 grant awarded beginning of December • Consortia agreements now due January 29

  12. Status Report • NSP2 NOFA Amendment: Consortium Agreements • Due now January 29, 2010 (formerly Dec 1) • Technical Assistance Rollout • Nationwide clinics start December • Hosted by HUD • For grantees and subrecipients • New HUD Web Site: www.hudnsphelp.info • NSP resource exchange • Live: Wednesday, December 2

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