DEHCR > Neighborhood Stabilization Program (NSP)

Neighborhood Stabilization Program (NSP)

The Neighborhood Stabilization Program (NSP) provides assistance to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities.

NSP1 was authorized under Title III of the Housing and Economic Recovery Act of 2008. HUD is treating Neighborhood Stabilization Program funds as a special allocation of Fiscal Year (FY) 2008 CDBG funding. Neighborhood Stabilization funds can be used to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of property values of neighboring homes.

NSP3 funds are the third round of neighborhood stabilization grants the Federal Department of Housing and Urban Development (HUD) is making available to all states and select units of local government. NSP3 funds are authorized under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) of 2010. HUD has allocated NSP3 funds on a formula basis. All states, including Wisconsin, received a minimum allotment of $5 million of NSP3 funds. HUD is requiring that these funds be targeted to communities with the most severe neighborhood problems associated with the foreclosure crisis.

NSP1

44 applicants submitted proposals for $108 million in funding under the NSP1 program they include: Local units of government, including CDBG Entitlements and HOME Participating Jurisdictions; Federally-recognized American Indian tribe or band in the state of Wisconsin; Nonprofit corporations organized under Chapter 181; Housing Authorities. Eligible applicants will have experience in property acquisition and/or rehabilitation/redevelopment utilizing federal funding.

NSP3

Eligible applicants for NSP3 funds are current NSP1 sub-grantees with census tracts that have a foreclosure risk scores of 13 or more.

Eligible Activities

NSP1

All activities funded under the NSP1 program must be CDBG-eligible and must meet the CDBG low-moderate-middle income national objective. Certain CDBG rules have been superseded to allow the eligible uses described under the Housing and Economic Recovery Act (HERA). This provision redefines and supersedes the definition of "low- and moderate-income" effectively allowing households with incomes up to 120% CMI (middle income) to qualify.

The categories of eligible activities include:

Applicant purchase and rehabilitation of homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties for eligible households;
Direct down payment/gap financing assistance to eligible homebuyers purchasing a foreclosed property;
Establishment of land banks for foreclosed homes in neighborhoods where property stabilization is required;
Demolition of blighted structures;
Redevelopment of sites;
Delivery costs, including: establishing financing mechanisms for purchase and redevelopment of eligible properties.

NSP3

Eligible Activities are the same as NSP1, with the exception of Activity E Redevelopment which for NSP3 must be for housing only. Additional information can be found on the:

General Program Information

NSP1

Substantial Amendment

Award Summary

Incentive and Recouped Awards

Timeline

NSP3

Substantial Amendment

Award Summary

Timeline

NSP Program Links

CPD Income Eligibility Calculator

NSP Implementation Handbook

NSP Household Income Limits

NSP Rent Limits

State Rehab Standards

MBE/WBE Business Listings

MBE-WBE Semi-Annual Report

NSP Implementation Handbook

The handbook presents procedures and requirements of the Neighborhood Stabilization Program (NSP). It was designed to assist in implementing a NSP grant. The Department of Administration will monitor the performance of grant recipients based upon the contents of this manual.

This manual will be revised no less than once every grant cycle.

Only the most recent edition of the manual will contain the rules in effect at any time.