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Rachel AudiRachel AudiNovember 12, 2009November 12, 2009

HUD Neighborhood Stabilization Program

NSP1Created 2008 - Housing Economic Recovery Act$4 billion grants to States and Locals for

purchase & rehab, downpayment assistanceNSP2

Created 2009 - ARRA $2 billion grants to States, Locals, Nonprofits or

Consortia of NonprofitsNSP Task Force advocacy:

Extension of the 18 months for the NSP1 funds

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

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

Legislation: Housing Preservation and Tenant Protection Act

To be introduced by Barney Frank (D-MA), ChairCovers nearly 2 million affordable subsidized

housing apartmentsExtend enhanced vouchers to all HUD-insured

propertiesProtections for

Residents facing conversionProjects facing foreclosure

Expected to be introduced in December 2009

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 yearsDedicated funds (not subject to appropriations)For extremely low- and very low-income households

$2 billion TARP funds for owner-occupantsAt least 3 months behind in mortgage paymentHave lost employment or underemployedHave ability to make future mortgage paymentsMust repay loan/credit/advance

Legislation: Preserving Homes and Communities Act, S. 1731Introduced by Senator Jack Reed (D-RI)Provides $2 billion for Housing Trust FundAuthorizes $6.4 billion to states to help prevent

foreclosure for owners whoIn financial hardship beyond controlAble to make mortgage payments in 15 months

Provides foreclosure protectionsRequires lenders to disclose to owner all

modification remedies to prevent foreclosureProhibits unnecessary mod & foreclosure fees

Creates grant program for foreclosure mediationRequires HUD implement plan to predict

foreclosure trends

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 areasWith 20% population decline since 1970Vacated industrial towns, facilities, housing

Funding for innovative renewal:Creation of land banksRecovered building materials reuseRemoval of abandoned propertiesCreation of open space and infrastructureLand use, brownfield, and strategic planning

NSP Challenges

Foreclosure environmentHomes in foreclosure process: 2.5 million

750,000 held by banksForeclosed homes sold by 2012: 4 million*

HUD disbursement of NSP fundingOnly 13.8% of funds obligated to-dateAll purchases must be made by fall 2010HUD 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

NSP Challenges

Investors & LocalsInvestors purchasing homes faster than non-profitsState 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 value25% of funds must help very low-income

Status ReportNSP1 Comments

HUDFederal Reserve

HUD review of NSP2 grant applicationsReviewing 404 applications$13 billion in requests$2 billion in funds available

NSP2 TimeframeHUD anticipates review NSP2 grant awarded

beginning of DecemberConsortia agreements now due January 29

Status ReportNSP2 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