(Washington, DC) – The U.S. Housing and Urban Development (HUD) announced last week that the District of Columbia will receive an additional $5 million grant to stimulate the housing market, generate job opportunities and revitalize neighborhoods hard-hit by high rates of foreclosure and vacancy.
The grant represents the third round of funding through HUD’s Neighborhood Stabilization Program (NSP) and will provide targeted emergency assistance to the District of Columbia to acquire, redevelop or demolish foreclosed properties. The federal government’s top housing department awarded an additional $1 billion in funding to all states along with a number of counties and local communities struggling to turn around the effects of the foreclosure crisis.
“These grants will support local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said Secretary Shaun Donovan in a HUD press announcement. “We want to make certain that we target these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight.”
In the statement, Donovan credited Senator Chris Dodd and Congressman Barney Frank for playing key roles in winning approval for NSP3 funds. The funding announced yesterday is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
There have been two other rounds of NSP funding: the Housing and Economic Recovery Act of 2008 (HERA) provided $3.92 billion and the American Recovery and Reinvestment Act of 2009 (Recovery Act) appropriated an additional $2 billion. Like the earlier rounds of NSP grants, the new round of funds are targeted to be used to purchase foreclosed homes at a discount and to rehabilitate or redevelop them in order to respond to rising foreclosures and falling home values.
To date, the District of Columbia has received $2.8 million under HERA, and $9.5 million under Recovery Act funds. Administering the funding for the District of Columbia is the Department of Housing and Community Development.
“This third round of NSP funding from HUD will further strengthen the District’s efforts to make investments that will stabilize neighborhoods, reduce blight, bolster neighboring home values, create jobs and produce affordable housing,” said Director Leila Finucane Edmonds. “NSP3 funds are critical to the District of Columbia, particularly because these funds are coming to the city at a time when local revenues are down and the effects of the recession persist.”
The District directed NSP1 funds to initiate a revitalization of the Ivy City neighborhood through the Ivy City Special Demonstration Project. Under the Ivy City project, DHCD and non-profit developers Habitat for Humanity of Washington, DC, Manna Inc. and Mi Casa Inc. are creating 58 total units of new housing, including 52 single-family homeownership opportunities for low- and moderate income households to help stabilize the neighborhood. Eight of the new homes were completed in August and are available for sale to eligible households through the developer, Mi Casa. Habitat will begin new construction and rehab of properties along Providence St. NE in October. Manna is also expected to begin phase one reconstruction work this fall.
The second round of NSP funding was awarded under a competitive process. The Department’s application for NSP2 funds focused on single-family and multi-family redevelopment and preservation through the acquisition of vacant and foreclosed properties; rehabilitation of single and multifamily properties; and down payment assistance to low and moderate income homebuyers in three District neighborhoods that have been hardest-hit by foreclosure and blight – Deanwood, Anacostia and Trinidad/Ivy City.
According to HUD’s announcement, NSP 3 funds will take full advantage of the “First Look” partnership Secretary Donovan announced with the National Community Stabilization Trust last week. Under First Look, NSP grantees have an exclusive 12-14 day window to evaluate and bid on properties before others can do so. “By giving every NSP grantee the first crack at buying foreclosed and abandoned properties in these targeted neighborhoods, First Look will maximize the impact of NSP dollars in the hardest-hit neighborhoods – making it more likely the properties communities want to buy are strategically chosen and cutting in half the traditional 75-to-85 day process it takes to re-sell foreclosed properties.”
HUD is expected to issue a guidance notice for NSP3 funding in the next few weeks to assist grantees in designing their programs and applying for funds. Following that guidance, the District will announce its plan to utilize the funding.