Neighborhood Stabilization Program (NSP) 2

ARRA provided $2 billion for NSP2, which is a competitive program that cities, states, and nonprofits can apply for by July 17, 2009.  NSP2 funds can be used to buy foreclosed or abandoned homes to rehab, resell, or demolish in order to stabilize neighborhoods.  At least 25% of the funds must be used for housing for those with incomes below 50% AMI. All NSP2 money must benefit people with incomes below 120% AMI.  ARRA requires HUD to select grantees in areas with the greatest number and percentage of foreclosures. NSP2 has tenant protections and Section 8 antidiscrimination provisions.

ARRA made some changes from the earlier NSP1 program:
•Vacant or demolished properties can only be redeveloped as housing.
•Demolition of public housing is prohibited.
•No more than 10% of an award can be used for demolition (unless HUD waives).
•Funds can be used to operate land banks.

Advocates should be aware that applicants must publicize the amount of NSP2 money sought, and how and where it will be used on the jurisdiction’s website as well as in general circulation newspapers 10 calendar days before submitting an application to HUD.  The public has only these 10 days to submit comments, a summary of which must be in the application. Public hearings are not required. Projects selected by grantees must spend half of the money within two years, and all of the money within three years.

HUD has set aside $50 million for technical assistance (TA) grants to be awarded, on a competitive basis, to states, local governments, nonprofits, for-profits, and consortiums of organizations.  $11.5 million will be for local TA activities and $38.5 million will be for national and regional TA activities.  Applications are due June 8, 2009. HUD announced the TA awards on August 26 (http://www.hud.gov/news/release.cfm?content=pr09-159.cfm).

(The Housing and Economic Recovery Act of 2008 (HERA), passed on July 30, 2008 provided $3.93 billion for NSP1; money for it has already been allocated to local jurisdictions. See NSP1 section)


List of Entities Indicating Intent To Apply For NSP2
http://www.nlihc.org/doc/NSP2-Comment-Periods.xls

Compilation of Public Participation Language in NSP2 NOFA
http://www.nlihc.org/doc/PPC-NSP2-NOFA.pdf

HUD’s ARRA general NSP2 webpage, http://portal.hud.gov/portal/page?_pageid=153,7973319&_dad=portal&_schema=PORTAL

HUD’s more detailed CDBG NSP webpage, http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/index.cfm .

HUD's General ARRA website, http://portal.hud.gov/portal/page?_pageid=153,1&_dad=portal&_schema=PORTAL

Technical Assistance Collaborative/Consortium for Citizens With Disabilities
"Using the Neighborhood Stabilization Program to Help Create Permanent Supportive Housing" an 8-page guide

Enterprise Community Partners

Brookings Institution, "Design Snapshots"

Fair Housing

NSP2 Section of the ARRA Statute, http://www.nlihc.org/doc/NSP2-ARRA.pdf  

Underlying CDBG regulations, www.access.gpo.gov/nara/cfr/waisidx_07/24cfr570_07.html .