$7 billion Federal House-Flipping Program
The 2008 subprime mortgage crisis had a severe and lasting impact on the housing market. Millions of people lost their homes in foreclosure, home property values plummeted, and banks stop lending. In fact, according to the U.S. Census, last year the U.S. had 15 million vacant homes, an increase of 44% from 2000. The increasing number of home vacancies due to foreclosure and abandonment has driven home property values down in communities nationwide. To remedy this problem the Obama Administration passed the Neighborhood Stabilization Program (NSP). The primary goal of the program is to stabilize communities that have suffered the most by purchasing and redeveloping foreclosed and abandoned residential properties. The hope is that by fixing up vacant homes, property values will increase and people will be encouraged to renovate other homes in the community.
The NSP was established in 2008 by Title III of the Housing and Economic Recovery Act. The $7 billion program provides emergency assistance, in the form of grants, to state and local governments to acquire and redevelop foreclosed or abandoned properties within their communities. The state and local governments use the grants to buy, fix up, and resell the properties with the hope that property values will increase thus causing investors within the private sector to follow suit.
Thus far, several cities have made use of the program. Local groups in Baltimore, Chicago, Cleveland, Detroit, Minneapolis, Arlington, Palm Beach County, and many more are using the federal grants authorized by the NSP to revive their communities. The NSP allows for approaches tailored to local conditions by authorizing grants through liaisons with both non-profit groups and for-profit developers. In this way, the local groups and developers, not the federal government, make the informed decisions on how to best apply the funds. To assist such groups, the NSP allocates $50 million to national and local technical assistance providers to support the NSP grantees.
NSP Info and Resources
- NSP Resource Exchange
Site provides information and resources needed by NSP grantees, subrecipients and developers to purchase, rehabilitate, and resell foreclosed properties.
- U.S. Deptartement of Housing and Urban Development
Official site for the Neighborhood Stabilization Program.
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