Neighborhood Stabilization Program (NSP) 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% of the Area Medium Income (AMI) – $41,950 for a family of four in the Twin Cities. All NSP money must benefit people with incomes below 120% AMI – $100,700 for a family of 4 four in the Twin Cities.
In the past year, the Neighborhood Stabilization Program has received two rounds of funding:
- The first round, $3.93 billion in direct awards to states and local units of government, came through the Housing and Economic Recovery Act of 2008. It is referred to as NSP1.
- A competitive program for which cities, states, and nonprofits can apply was established though the stimulus bill from earlier this year. Referred to as NSP2, this appropriation totaled $1.93 billion.
A possible additional round of NSP funding (NSP3) is pending in Congress:
- The Troubled Assets Relief Program of 2009 would direct some of the bailout funds paid back by large institutions into programs benefiting extremely low-income households, neighborhoods, emergency mortgage relief efforts, and multifamily properties that are in default or foreclosure. This bill would authorize the transfer of $1.5 billion in TARP funds.
