Q: What is the Neighborhood Stabilization Program?
A: Congress created the Neighborhood Stabilization Program in September as part of the Housing and Economic Redevelopment Act of 2008. The U.S. Housing and Urban Development (HUD) has developed the program and is dispersing funds to every state. The money will provide assistance to awardees to stabilize neighborhoods – chiefly through acquiring and developing already foreclosed upon properties that might otherwise become abandoned or blighted. New Hampshire will receive $19.6 million under the program and will administer it according to an Action Plan.
Q: What communities can qualify for this money?
A: HUD requires that NSP funds be targeted to communities with high rates of foreclosure, high rates of subprime loans, and the likelihood of future high rates of foreclosure. Details of New Hampshire’s allocation strategy are in the draft Action Plan as posted on www.nhcdfa.org. Eligible applicants from within eligible communities include municipalities, non-profit affordable housing developers, for-profit affordable housing developers, and other service providers. Eligible communities are broken out into two groups: Tier 1 – Berlin, Derry, Manchester, Nashua and Rochester. Tier 2 – Barnstead, Claremont, Franklin, Farmington, Hillsborough, Laconia, Newport, Ossipee, Pittsfield, Raymond, Wakefield, and Whitefield.
Q: Are Entitlement Communities eligible to apply for these funds?
A: New Hampshire’s Entitlement Communities (defined by HUD as Dover, Manchester, Nashua, Portsmouth, and Rochester) are eligible to apply for funding through the Neighborhood Stabilization Program. Manchester, Nashua, and Rochester have been identified in the draft Action Plan as “Tier 1 high needs communities,” thus making them eligible for NSP funds.
Q: What is an Action Plan and how is it being formed?
A: For New Hampshire to receive the Neighborhood Stabilization Funds, CDFA received approval of its comprehensive plan – Action Plan – to HUD in January of 2009. The Action Plan will provide the details of how the program will work in the granite state, e.g. who can apply and how projects will be funded.
CDFA formed a Working Group that includes representatives from housing, government, financing, and municipal sectors which is meeting weekly to develop the program. CDFA formed a broad-based Neighborhood Stabilization Program Coalition that gave input to the draft Action Plan.
There was a 15-day public comment period on the draft plan from October 30 through November 14, 2008, during which time anyone from the public could make comments on the draft plan. The plan was ultimately approved by the CDBG Advisory Committee, the Governor and then submitted to HUD.
Q: Where can I get detailed program rules for the Neighborhood Stabilization Program?
A: Detailed and final HUD regulations are complete and can be found on the Neighborhood Stabilization Overview section of the CDFA website at www.nhcdfa.org. See the front page of the NSP section of this web site. New Hampshire level program rules will be established in the Action Plan.
Q: What can the money be used for?
A: HUD will allow the following uses in states for Neighborhood Stabilization funds. CDFA, with input from the public, will determine New Hampshire eligible uses from within these:
- At least 25% of the funds must be used for the purchase and redevelopment of homes and properties that will be used for house individuals and families with incomes not greater than 50% AMI (Area Median Income);
- All funds used must be used to serve households at 120% of median income or less.
States may use NSP funds to:
- Establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties, including such mechanisms as soft-seconds, loan loss reserves, and shared-equity loans for low- and moderate-income homebuyers
- Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties
- Establish land banks for homes that have been foreclosed upon
- Demolish blighted structures
- Redevelop demolished or vacant properties
More details will be outlined in the Action Plan once we receive input from the working group, coalition, and public input.
Q: If my community wants to purchase some foreclosed upon homes, does it matter how much we buy them for?
A: Yes. Every building purchased with NSP funds must be purchased for at least 5% less than market value. And, the cumulative sale price of all buildings purchased under the state’s allocation must be 15% less than market value (so some buildings will need to be purchased for significantly less than 15% of market value). The plan for meeting this acquisition requirement will be addressed in the Action Plan.
Q: Could we use these funds to purchase dilapidated buildings that are not in foreclosure or abandoned?
A: Yes under uses D and E above. Any programs under use A B or C must be targeted at buildings that are foreclosed upon or abandoned. The foreclosure can be a funder foreclosure or a tax lien foreclosure.
Q: Could we use the funds to non-residential property?
A: Yes, under uses D and E above. Uses A, B and C require that properties be residential in nature.
Q: Can we tear buildings down with these funds?
A: Yes. Demolition of blighted buildings ( is an allowable use of NSP funds according to HUD. That said, the focus of NSP funds is to stabilize neighborhoods, not to rescue or raze single buildings per se. Although final guidelines have not yet been established for New Hampshire, communities should be thinking about neighborhood stability and how any proposed building renovation would contribute to that broader stability.
Q: Could we purchase foreclosed homes and then rent them, rather than re-sell them?
A: Yes.
Q: Does it matter how much we sell or rent any purchased buildings for in the end, as long as they help the neighborhood?
A: Yes. At least 25% of the state’s NSP funds must be used for the purchase and redevelopment of homes and properties that will be used for house individuals and families with incomes not greater than 50% AMI (Area Median Income). All funds used must be used to serve households at 120% of median income. Rental and for-sale properties will be required to remain affordable for at least 20 years.
Q: I am in jeopardy of losing my home. How can this program help me?
A: The Neighborhood Stabilization Program is not designed for individuals looking for foreclosure assistance. The program is for properties that have already been foreclosed upon. People looking for individual assistance should see our referral call list on our website.
Q: When can we apply for funds?
A: Pre-applications closed December 19, 2008. CDFA received over $71 million in requests from 18 applicants in Tier 1 and 2 communities. The applicants in Tier 1 communities were invited to submit final applications, which were due on May 1, 2009. Recycled NSP funds will be available to Tier 2 communities in mid 2010.
Q: Who will be reviewing the applications and deciding who gets Neighborhood Stabilization Program funds?
A: The use of funds, application process, and the allocation process will be determined in the Action Plan.
Q: Why is the Community Development Finance Authority administering the program?
A: The Community Development Finance Authority is the organization that administers the statewide (Small Cities) Community Development Block Grant (CDBG) program. The Neighborhood Stabilization Program is funded through the CDBG program.
Q: Who can I contact for more information?
A: You can call CDFA at 603.717.9108 or email us at neighborhood@nhcdfa.org
