HUD Awards $149 Million to California for Neighborhood Stabilization

U.S. Housing and Urban Development Secretary Shaun Donovan awarded an additional $149 million in funding to California communities struggling to reverse the effects of the foreclosure crisis. The grants represent a third round of funding through HUD’s Neighborhood Stabilization Program (NSP) and will provide targeted emergency assistance to help local California communities acquire, redevelop or demolish foreclosed properties.

“These grants will support local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said Donovan.

“We want to make certain that we target these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight. As a direct result of the leadership provided by Senator Chris Dodd and Congressman Barney Frank, who played key roles in winning approval for these funds, we will be able to make investments that will reduce blight, bolster neighboring home values, create jobs and produce affordable housing,” he added.

The funding is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act. There have been two other rounds of NSP funding: the Housing and Economic Recovery Act of 2008 (HERA) provided $3.92 billion and the American Recovery and Reinvestment Act of 2009 (Recovery Act) appropriated an additional $2 billion.

Like those earlier rounds of NSP grants, these targeted funds will be used to purchase foreclosed homes at a discount and rehabilitate them in response to rising foreclosures and falling home values.

State and local governments can use their neighborhood stabilization grants to acquire land and property; demolish or rehabilitate abandoned properties; offer down payment and closing cost assistance to low- to moderate-income home buyers.

These grantees can create “land banks” to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging re-use or redevelopment of urban property. HUD will issue an NSP3 guidance notice in the next few weeks to assist grantees in designing their programs and applying for funds.

NSP seeks to prevent future foreclosures by requiring housing counseling for families receiving homebuyer assistance.

HUD, as it did with NSP1, followed key indicators for the distribution formula outlined by Congress. HUD is using the latest data to implement the Congressional formula. The formula weighs several factors to match funding to need in the 20 percent most distressed neighborhoods as determined based on the number and percentage of home foreclosures, number and percentage of homes financed by a subprime mortgage related loan, and number and percentage of homes in delinquency.

In addition to a third round of NSP funding, the Dodd-Frank Wall Street Reform and Consumer Protection Act creates a $1 billion Emergency Homeowners Loan Program to be administered by HUD. This loan program will provide up to 24 months in mortgage assistance to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.

The complete list with corresponding amounts is as follows:

Apple Valley $1,463,014

Bakersfield $3,320,927

State Of California $7,777,019

Compton $1,436,300

Contra Costa County $1,871,294

Corona $1,317,310

Fontana $2,695,735

Fresno $3,547,219

Fresno County $2,739,766

Hemet $1,360,197

Hesperia $1,785,047

Imperial County $1,708,780

Indio City $1,092,071

Kern County $5,202,037

Lancaster $2,364,566

Long Beach $1,567,935

Los Angeles $9,875,577

Los Angeles County $9,532,569

Madera County $1,659,017

Merced $1,196,182

Merced County $2,705,877

Modesto $2,951,549

Monterey County $1,284,794

Moreno Valley $3,687,789

Oakland $2,070,087

Ontario $1,872,853

Orange County $1,004,948

Palmdale $2,310,023

Perris City $1,342,449

Pomona $1,235,629

Rialto $1,936,370

Richmond $1,153,172

Riverside $3,202,152

Grantee NSP3 Grant Riverside County $14,272,400

Sacramento $3,762,329

Sacramento County $4,595,671

San Bernardino $3,277,401

San Bernardino Count $10,438,181

San Joaquin County $4,398,543

Santa Ana $1,464,113

Solano County $1,622,757

Stanislaus County $4,175,947

Stockton $4,280,994

Tulare County $2,845,529

Vallejo $1,744,593

Victorville $2,159,937

California Total $149,308,651