Neighborhood Stabilization Program

The Neighborhood Stabilization Program (NSP) was authorized on July 30, 2008 as Title III of Division B of the Housing and Economic Recovery Act of 2008 (HERA). THDA administers the federally funded NSP on behalf of the U.S. Department of Housing and Urban Development. The purpose of NSP is to provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. NSP funding is provided by formula based on the following criteria: areas with the greatest percentage of home foreclosures; areas with the highest percentage of homes financed with subprime mortgages; and, areas identified as likely to face a significant rise in the rate of home foreclosures.

NSP funds are considered a special allocation of Community Development Block Grant (CDBG) funding for FY 2008. The statutory and regulatory requirements of CDBG apply to NSP funds unless specifically waived by the NSP regulations. CDBG and NSP program regulations are incorporated by reference in this Program Description. The federal regulations take precedence over this Program Description in cases of conflicting requirements.

Time is of the essence with regard to NSP in that "any state or local government that receives amounts pursuant to this section shall not later than 18 months after the receipt of such amounts, use such amounts to purchase and redevelop abandoned and foreclosed homes and residential properties [Housing and Economic Recovery Act of 2008, Section 2301(c)(1)]."

"Funds are used when they are obligated by a state, unit of general local government, or any subrecipient thereof, for a specific NSP activity. Funds are obligated for an activity when orders are placed, contracts are awarded, services are received and similar transactions have occurred that require payment by the state, unit of general local government, or subrecipient during the same or a future period." (Federal Register, volume 73, N0. 194, p. 58332, October 6, 2008) "

At the end of the statutory 18-month use period, which begins when the NSP grantee receives its funds from HUD, the state or local government NSP grantee's accounting records and DRGR (the federal Disaster Recovery Grant Reporting system collects information on expenditures and obligations) information must reflect outlays (expenditures) and unliquidated obligations for approved activities that, in the aggregate, are at least equal to the NSP obligations.All NSP grantees must expend on eligible NSP activities an amount equal to or greater than the initial allocation of NSP funds within 4 years of receipt of those funds or HUD will recapture and reallocate the amount of funds not expended." (Federal Register, volume 73, No. 194, p.58340 October 6, 2008)

For additional information or if you have questions, please contact Mike Clinard at 615-815-2042.