Wednesday, September 8, 2010

HUD Awards $4.9 million in Funding to Ease the Impact of Foreclosures in Atlanta

The State of Georgia received $50 million in HUD funding
Mayor Kasim Reed was joined today by HUD’s Southeast Regional Administrator Edward Jennings, Jr., Congressman Hank Johnson and other state and local leaders as U.S. Housing and Urban Development Secretary Shaun Donovan awarded an additional $50,421,988 in funding to Georgia communities struggling to reverse the effects of the foreclosure crisis. The grants announced today represent a third round of funding through HUD’s Neighborhood Stabilization Program (NSP) and will provide targeted emergency assistance to help local communities in Georgia acquire, redevelop or demolish foreclosed properties.

“The City of Atlanta is grateful for the support of the U.S. Department of Housing and Urban Development and the Georgia Department of Community Affairs,” said Mayor Kasim Reed. “The City of Atlanta is focused on continuing to do the work necessary to purchase, renovate and resale abandoned foreclosed homes and apartment complexes and make them livable once again. With additional NSP3 grant funds we will be able to reach deeper into our communities.”

“These grants will support local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said Donovan. “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. As a direct result of the leadership provided by Senator Chris Dodd and Congressman Barney Frank, who played key roles in winning approval for these funds, we will be able to make investments that will reduce blight, bolster neighboring home values, create jobs and produce affordable housing.”

“Targeting these funds to hard hit areas in the state will help local leaders and communities fight blight, abandonment and work towards improving home values and create jobs.” said, Edward Jennings, Jr., US Housing and Urban Development, Southeast Regional Administrator.

The funding announced today is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act. To date, 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 those earlier rounds of NSP grants, these targeted funds will 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. Today, 92 cents of every dollar from the first round of NSP funding is obligated – and is in use by communities, buying up and renovating homes, and creating jobs.

State and local governments can use their neighborhood stabilization grants to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer down payment and closing cost assistance to low- to moderate-income homebuyers (household incomes not exceed 120 percent of area median income). In addition, these grantees can create “land banks” to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging re-use or redevelopment of urban property.

NSP 3 will take full advantage of the historic First Look partnership Secretary Donovan announced with the National Community Stabilization Trust last week. First Look gives NSP grantees 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 the traditional 75-to-85 day process it takes to re-sell foreclosed properties in half. NSP also seeks to prevent future foreclosures by requiring housing counseling for families receiving homebuyer assistance. HUD seeks to protect future homebuyers by requiring States and local grantees to ensure that new homebuyers under this program receive homeownership counseling and obtain a mortgage loan from a lender who agrees to comply with sound lending practices.

In determining the allocations announced today, HUD, as it did with NSP1, followed key indicators for the distribution formula outlined by Congress. HUD is using the latest data to implement the Congressional formula. The formula weighs several factors to match funding to need in the 20 percent most distressed neighborhoods as determined based on the number and percentage of home foreclosures, the number and percentage of homes financed by a subprime mortgage related loan, and the number and percentage of homes in delinquency. To estimate the level of need down exactly what to the neighborhood level, HUD uses a model that takes into account causes of foreclosures and delinquencies, which include housing price declines from peak levels, and increases in unemployment, and rate of high cost and highly leveraged loans. HUD also considers vacancy problems in neighborhoods with severe foreclosure related problems.

In addition to a third round of NSP funding, the Dodd-Frank Wall Street Reform and Consumer Protection Act creates a $1 billion Emergency Homeowners Loan Program to be administered by HUD. This loan program will provide up to 24 months in mortgage assistance to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition. HUD will announce additional details, including the targeted areas and other program specifics when the program is officially launched in the coming weeks.

About HUD

HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.







Georgia
Atlanta
$4,906,758

Augusta-Richmond County
$1,161,297

Carroll County/Villa Rica City
$1,190,390

Clayton County
$3,796,167

Cobb County
$2,415,784

Columbus-Muscogee Co
$1,128,174

Dekalb County
$5,233,105

Douglas County
$1,628,471

Fulton County
$3,094,885

State Of Georgia
$18,679,977

Gwinnett County
$2,065,581

Henry County
$1,217,736

Macon
$1,503,897

Paulding County
$1,372,214

Savannah
$1,027,553

Georgia Total
$50,421,988

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