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Neighborhood Stabilization Program
The Housing and Economic Recovery Act of 2008 allocated $3.92 billion in Neighborhood Stabilization Program (NSP1) funds to states and Community Development Block Grant (CDBG) entitlement jurisdictions. Among other uses, state and local governments may use these funds to purchase or rehabilitate foreclosed or abandoned properties. Communities must allocate at least 25% of these funds to house families whose incomes do not exceed 50% of area median income. Congress treats the NSP1 funds as CDBG funds. Therefore, the funds are subject to the obligation to affirmatively further fair housing, as well as Section 3 employment requirements. In 2008, grantees drafted and submitted plans for using the NSP1 funds. Many local advocates commented on these plans. Grantees must submit quarterly reports and post them on their websites, enabling advocates to continue to monitor the use of NSP1 funds and ensure that they are being used to help preserve and create affordable housing.
The American Recovery and Reinvestment Act of 2009 included an additional $2 billion for the NSP program, referred to as NSP2. Unlike the original NSP program, NSP2 funds will be allocated by competition to states, local governments, nonprofits, and consortia of nonprofits, which may submit proposals in partnership with for-profit entities. HUD published grant criteria in May 2009, and applications were due July 17, 2009. NSP2 grantees were announced on January 14, 2010.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 provided another $1 billion in NSP funding, referred to as NSP3. These funds were allocated to every state and to selected governments according to a need-based distribution formula outlined by Congress.
Some of the issues that are of primary concern to housing advocates are whether NSP grantees are meeting their income-targeting requirements; whether NSP funds are being used to preserve and create rental housing; whether NSP grantees are satisfying their obligation to affirmatively further fair housing; and whether NSP grantees are complying with the Section 3 employment requirements. This page contains references to resources that outline permissible uses for NSP funds, as well information on how jurisdictions throughout the country plan to use their NSP funds.
HUD Issues Regulations Implementing the Neighborhood Stabilization Program
This NHLP article provides a detailed review of HUD’s regulations governing the NSP1 program.
Obama Signs Stimulus Bill Providing Major Support for Affordable Housing
This NHLP article provides an overview of the NSP2 provisions of the American Recovery and Reinvestment Act of 2009.
HUD Announces Neighborhood Stabilization Program 2 Grants
This NHLP article reviews the jurisdictions that received NSP2 funding and discusses some of the common proposed uses of NSP2 funds.
NSP: Innovative Development Strategies for Very Low-Income Housing
NHLP has published a report highlighting five Neighborhood Stabilization Program (NSP) grantees that used innovative strategies to meet their obligations to provide housing for very low-income families.
The report focuses on acquisition and rehabilitation of multifamily housing. The successes of each grantee demonstrate that NSP funds, leveraged with other resources, can preserve and increase a community’s supply of affordable housing. The jurisdictions featured in the report are Knoxville, Tennessee; Phoenix, Arizona; Cleveland, Ohio; Greenville County, South Carolina; and Hamilton County, Ohio.
NSP3: Reviewing Your Jurisdiction’s Action Plan
This document summarizes key provisions of the Neighborhood Stabilization Program (NSP3) under the Dodd-Frank Wall Street Reform Act and discusses NSP3 topics that should be of particular interest to housing advocates who are reviewing their jurisdiction’s NSP3 action plan.
HUD Improves Transparency in the Neighborhood Stabilization Program
After repeated requests from advocacy organizations, including the Housing Justice Network, HUD has posted on its website performance reports for the Neighborhood Stabilization Program (NSP). Among other things, these reports will help local advocates identify the communities in which NSP funds are being spent, the number of foreclosed or abandoned properties that have been acquired with the money, and the amount of funds that the jurisdiction has expended so far.
Neighborhood Stabilization Program (NSP2) Under the Recovery Act
This memo summarizes key provisions of the Neighborhood Stabilization Program (NSP2) under the Recovery Act and discusses NSP2 topics that are of particular interest to housing advocates.
NSP2 Sample Comment Letter
This sample comment letter can be used by advocates in reviewing the sufficiency of their jurisdictions’ NSP2 proposals.
Advocates' Checklist: NSP1 Quarterly Reports
This document provides guidelines for advocates seeking to review their jurisdictions’ Neighborhood Stabilization Program 1 (NSP1) quarterly performance reports.
Neighborhood Stabilization Program 2 (NSP2) Grantees
This document lists the states, local governments, and nonprofits who were awarded NSP2 grants. It also includes brief descriptions of each grantee’s plan for using the funds.
Tools for California Advocates
NHLP and Western Center on Law and Poverty have developed documents that can be used to urge California redevelopment agencies to expend their Low and Moderate Income Housing funds and their NSP funds in a timely and thoughtful manner.
Neighborhood Stabilization Program 3 (NSP) Grantees
This document lists the states and local governments who were awarded NSP3 grants.
Statutes and Regulations
HUD Notice Implementing NSP Funds
In October 2008, HUD published a notice governing the use of the NSP1 funds authorized under the Housing and Economic Recovery Act of 2008.
The NSP2 NOFA sets forth the program requirements for entities applying for NSP2 funds.
Housing and Economic Recovery Act of 2008 (HERA)
HERA authorized $3.9 billion for the initial NSP program.
American Recovery and Reinvestment Act of 2009 (ARRA)
ARRA authorized $2 billion for the NSP2 program.
HUD PIH Notice 2009-52
This HUD notice implements the tenant protection provisions governing NSP-funded properties.
HUD Revised Notice Implementing NSP Funds
In June 2009, HUD published a notice with revisions and technical corrections to its October 2008 notice governing the use of NSP funds.
HUD Recapture Notice
In October 2010, HUD published a notice amending the recapture and reallocation provisions for NSP funds not obligated (not under contract) by the 18-month deadline. The accompanying HUD Policy Alert summarized in the notice.
The Dodd-Frank Act authorized $1 billion for the NSP3 program.