What is NSP?
NSP is a component of the Community Development Block Grant (CDBG). It was established by the U.S. Department of Housing and Urban Development (HUD) for the purpose of stabilizing communities that have suffered from foreclosures and abandonment. Eligible uses of the funds include:
- Establishing financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties;
- Purchasing and rehabilitating homes and residential properties abandoned or foreclosed;
- Establishing land banks for foreclosed homes;
- Demolishing blighted structures;
- Redeveloping demolished or vacant properties;
- Homebuyer assistance
There are three rounds of funds available:
1. NSP1: In July 2008, the Housing and Economic Recovery Act (HERA) cleared HUD to grant $3.9 billion through the first round of NSP.
2. NSP2: The American Recovery and Reinvestment Act (ARRA) of 2009 provided another $2 billion through NSP2, and
3. NSP3: The Dodd-Frank Act in July 2010 cleared another $1 billion through NSP3. It is this third round that was terminated.
As the lead agency of the CDBG Program, Hennepin County has received an allocation of $3,885,729 from HUD under NSP. In addition, Hennepin County submitted a competitive NSP application to Minnesota Housing Finance Agency (MN Housing) and was awarded $4,715,298. NSP funds were distributed among 12 of the hardest foreclosure-struck cities in Hennepin County (see figure, right).
A number of positive elements have come from NSP funds, including:
Mixed Reactions to NSP Termination
As some of the above-referenced articles and links suggest, feelings surrounding this program's termination have been mixed. Is it a program that helps stabilize neighborhoods and create jobs? Was it the right move given our nation's current deficit? Here are two video clips that explain how Congress feels: