Add the City of Chicago and the State of Illinois to the list of NSP intermediaries that still have not named the recipients of their Neighborhood Stabilization Program allocation. The Illinois Department of Human Services has been named as the lead adminstrative agency by the Governor.

In all, Illinois received approximately $172 million for its NSP program through the Housing and Economic Recovery Act of 2008.  The Act passed in July 2008. NSP funds must be returned if they are not spent within 18 months.

Illinois is not alone.  The Kansas Department of Commerce still has not named its NSP awards at all.

Yesterday, I mentioned how states including Oregon and California had announced their (more…)

While HUD announced the first round of Neighborhood Stabilization Program funding back in February, it has been a slow process getting those dollars into projects.  .

The Department of Housing and Urban Development announced plans to allocate $3.92 billion to buffet the mounting foreclosure crisis. NSP derives its monies from the Housing and Economic Recovery Act of 2008, through the Community Development Block Grant (CDBG) program. HUD announced a second round of NSP funding early this summer.  It is a smaller round, of approximately $2 billion.

Together, this $6 billion program is the most direct response by the government to stimulate the redevelopment of foreclosed properties.  In the context of federal spending, it is a drop in the bucket.  Six billion dollars is less than the sum of dollars spent (more…)

The North Carolina Department of Commerce announced the full list of recipients for the state’s NSP grant program. In all, the state awarded $48.85 million to mitigate foreclosures in the state.  The funds come from HUD.  Nationally, approximately $4 billion was allocated to the program.

At a time when the Federal Reserve is printing one billion dollars every hour in new money, putting only $4 billion on foreclosures seems like a huge mis-allocation.  For North Carolina, with the nation’s tenth largest population, the funds will be useful but more certainly could have been utilized.  In fact, Commerce received more than $100 million in requests for its NSP funds.

Just think how much we could spend to repair our neighborhoods if we could get bonuses like those executives at AIG.  Even if we don’t know how to make a huge money losing bet on a credit default swap.

Wake County is the big winner.  It took home a bit more than 20 percent of all funds granted by the state.  Both the City and the County were awarded their own grants.  As well, Passage Home and St. Augustine’s College CDC (no web page) each received more than $2 million.  The two non-profits both plan to put the money into the Southeastern Raleigh area, a neighborhood that border’s on downtown Raleigh and its convention center.  It appears that the City also intends to put its funds in that area.  This would do a lot to shore up the capital, although the capital is hardly reeling.  In fact, a report out today shows that the Raleigh-Cary MSA is the leading city in the country for in-migration, sparked by the availability of good jobs in government and technology.

Some of the large metro areas were largely shunned. The City of Durham received $2.1 million.  Non-profits and the City had applied for approximately $5 million. At CRA-NC, our project was turned down.

Lexington and Gastonia and Henderson, all relatively small cities, each got $2 million.

For those who are shut out, some of the intermediary funding could still be a savior.  The North Carolina Community Development Inititiative got $3.5 million.  It will re-allocate a portion of those funds.  The North Carolina Housing Finance Agency got $4 million.  Self-Help Credit Union, one of the state’s most successful development agencies with operations in metro areas in most of the “greatest need” areas, only got $2.5 million.

Self-Help plans to use the money to create loan opportunities for families that want to buy these properties after they are redeveloped.  This is a different strategy, and one that should serve to enhance Self-Help’s balance sheet.  There loans will come with some guarantees, they will receive interest on their loans, and they will be collateralized.  Other recipients will spend their funds, Self-Help will add the money to its working assets.

North Carolina is waiting on the news, upcoming any day, on the awarding of NSP grants.  The North Carolina Department of Commerce’s Division of Community Assistance had indicated that decisions might be announced this week.  The DCA plan for HUD proposed contracts by March 1st, with a caveat that it could be subject to change.

The state plans to distribute the money through three channels – one for non-profits, one for local governments, and one for set asides to community development financial institutions and the NC HFA.  Charlotte has a specific allotment, on top of its competition in the pool for other dollars.  HUD’s NSP grants will total $3.92 billion.  The Stimulus included language to add another $2 billion in funds.  In the first $4 billion, North Carolina was alloted $52.3 million.  That money can be used in the 23 counties designated for greatest need.  Here is the points system:

• Demonstration of Need: 50 points (statistics on the level of foreclosures, housing quality, poverty)
• Treatment of Need: 20 points (appropriateness of the proposed strategy in mitigating those cited needs)
• Capacity of agent (non-profit, government, or cdfi/HFA): 20 points
• Green status: 1 point
• Mitigation of fraud: 4 points
• Socioeconomic factors: 5 points

President Obama has signed legislation that will impact our nation’s foreclosure crisis.  It is not a moment too soon, and it remains to be seen if this is enough action, but at least we finally have policies that are designed to work directly on the root problems that are undermining our economy.

Obama’s plan, the Homeowner Affordability and Stability Plan (pdf here), will be announced in Phoenix later this morning. It has some great elements.  The plan will let homeowners refinance their mortgages, which Obama believes will save a (more…)