Explanation
In response to the housing mortgage crisis, Congress passed the Housing and Economic Recovery Act (HERA) of 2008. Title III of Division B of this statute appropriates $3.92 billion for emergency assistance for redevelopment of abandoned and foreclosed homes and residential properties, and provides that grants are to be considered Community Development Block grant (CDBG) funds. The grant program under Title III is commonly referred to as the Neighborhood Stabilization Program (NSP).
NSP funds are to be used to: (A) establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties, including such mechanisms as soft-seconds, loan loss reserves, and shared-equity loans for low- and moderate-income homebuyers; (B) purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties; (C) establish land banks for homes that have been foreclosed upon; (D) demolish blighted structures; and (E) redevelop demolished or vacant properties. HUD requires that grantees use at least 25 percent of the funds for individuals or families whose incomes do not exceed 50 percent of the area median income. In addition, all activities funded by NSP must benefit low- and moderate-income persons whose incomes do not exceed 120 percent of area median income.
HERA calls for allocating funds to States and units of local government with the greatest need, which is based on - (A) the number and percentage of home foreclosures in each State or unit of general local government; (B) the number and percentage of homes financed by a subprime mortgage related loan in each State or unit of general local government; and (C) the number and percentage of homes in default or delinquency in each State or unit of general local government.
As a result of HUD's formula, the city of Columbus has been awarded $22,845,495 of HUD NSP grant funds.
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