The Neighborhood Stabilization Program first round (NSP-1) was established for the purpose of providing emergency assistance to stabilize communities with high rates of abandoned and foreclosed homes, and to assist households whose annual incomes are up to 120 percent of the Area median Income (AMI).
The Neighborhood Stabilization Program third round (NSP-3) provided an additional $1 billion on a formula basis to 270 state and local governments.
NSP funds can be utilized for activities which include:
- Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties
- Purchase and rehabilitate homes and residential properties abandoned or foreclosed
- Establish land banks for foreclosed homes
- Demolish blighted structures
- Redevelop demolished or vacant properties
In addition, NSP funds were required to meet one of the following Community Development Block Grant (CDBG) national objectives:
- Housing Activities: Providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income.
- Area Benefit Activities: Benefiting all the residents of a primarily residential area in which at least 51% of the residents have incomes at or below 120% of area median income. (NSP-1 only)
- Limited Clientele Activities: Serving a limited clientele whose incomes are at or below 120% of area median income.
Through the Housing and Economic Recovery Act (HERA), in 2009 and 2011, the City of Kokomo received $2.18 million for NSP-1 and $1.01 million for NSP-3 respectively. The City of Kokomo immediately established a successful program for neighborhood stabilization through the purchase and redevelopment of vacant, foreclosed homes in the city. To date, fourteen homes have been acquired and totally rehabilitated. With up to 20 percent down-payment assistance being made available to qualified home buyers in the form of forgivable loans and pre-purchase home ownership counseling, the homes are now being sold, and properties are being placed back on the tax rolls. Approximately $20,000 in annual property tax revenue has been immediately reestablished, and over 50 employees from seven local contracting firms have directly benefited from the NSP programs as well. For example, two local construction companies on the verge of closing their doors have not only recovered, but have dramatically increased their workforce. And because of the trickle-down effect, a positive impact has been seen elsewhere in the local economy. The program is yet another example of how the City of Kokomo has aggressively pursued additional funding and established new partnerships, while working with existing local companies to further improve the quality of life and appeal of our community.