Neighborhood Stabilization Program 2
Neighborhood Stabilization Program (NSP) provides assistance for the redevelopment of abandoned and foreclosed homes and residential properties in order that such properties be returned to productive use or made available for redevelopment purposes. NSP has five eligible uses of funds: establishment of financing mechanisms for purchase of foreclosed homes; purchase and rehabilitation of abandoned or foreclosed homes; land banking of foreclosed homes; demolition of blighted structures; and redevelopment of vacant or demolished property.
NSP was initially established by the Housing and Economic Recovery Act of 2008 (HERA). The HERA version of NSP (NSP1) provided $3.92 billion in funding for emergency assistance to states and local governments. The Recovery Act provides an additional $2 billion in NSP funding (NSP2) but makes several fundamental alterations to the program. First, the Recovery Act establishes NSP2 as a competitive program as opposed to the formula distribution. Second, NSP2 funding was available to non-profit organizations, as well as states and local governments. NSP is considered to be a component of the Community Development Block Grant (CDBG) program and basic CDBG requirements govern the NSP program. Recovery Act funding will also provide $50 million of the $2 billion for NSP technical assistance (NSP TA) to improve the capacities of NSP1 and 2 communities to swiftly carry out high-performing, compliant neighborhood stabilization programs.