HPD COMMISSIONER CESTERO INVITES DEVELOPERS TO APPLY FOR $9 MILLION IN STIMULUS FUNDS TO COMBAT FORECLOSURE AND STABILIZE NYC NEIGHBORHOODS

Federal Funding Will Be Used to Assist Homebuyers, Purchase and Renovate Foreclosed Units, and Develop Vacant Sites for Residential Use

New York, NY – New York City Department of Housing Preservation and Development (HPD) Commissioner Rafael E. Cestero announced today that the City is releasing the Notice of Funding Availability (NOFA) for developers to apply for funding under the U.S. Department of Housing and Urban Development’s (HUD) second round of the Neighborhood Stabilization Program (NSP2). The funding available through this NOFA is intended to aid applicants in creating new programs—or to build on existing programs—that can assist vacant, foreclosed, and abandoned properties in neighborhoods hardest hit by the foreclosure crisis transition to affordable residential housing. Applications will be accepted on a rolling basis from May 11, 2010 to June 11, 2010.

Earlier this year the U.S. Department of Housing and Urban Development (HUD) awarded more than $20 million in Recovery Act funding to HPD under NSP2. The grants were awarded competitively to municipalities that developed the most innovative ideas to address the impact of the foreclosure crisis on their communities while demonstrating the capacity to be responsible stewards of taxpayer dollars. The City will use $9 million of the funding provided through the current NOFA to assist the successful applicants in purchasing, renovating and reselling foreclosed properties in the most-affected neighborhoods to low- and moderate-income families. The remainder of the NSP2 award will be programmed by HPD for mixed use housing assistance and to redevelop vacant lots and buildings for residential use. For additional criteria and information regarding the available NSP2 funding, please download the NOFA by visiting: http://www.nyc.gov/html/hpd/html/developers/rfp.shtml

“Just one foreclosure can create a domino effect that can quickly destabilize an entire community,” said HPD Commissioner Cestero. “By putting these federal dollars to work, we can turn a property that once threatened the stability of a neighborhood into an affordable home that becomes a lynchpin to its recovery. We are looking for applicants with innovative solutions to help us reclaim these vacant and foreclosed properties so we can bring hardworking families back to the neighborhoods that are most in need.”

HPD is seeking proposals that address the following:

• Homebuyer Down-Payment and Rehabilitation Cost Assistance Programs: Applicants may propose to provide down-payment, closing cost, and/or rehabilitation cost assistance to homeowners interested in purchasing foreclosed or abandoned one- to four-family homes in the target areas.
  
  
• Redevelopment Assistance: HPD encourages applicants to submit innovative proposals to redevelop foreclosed or abandoned properties or vacant land. Some example assistance models include: rent-to-own programs; scattered-site rental-housing programs; employer-assisted housing programs in which organizations work with employers to create homeownership opportunities for their staff; or other innovative models to help reach the objectives of the NSP.

To be eligible for NSP2 funding the applicant or applicant team must be a not-for-profit or for-profit organization with a proven track record of housing-related work in New York City and must have successfully completed a marketing campaign for low- and moderate-income families of one homeownership project of at least five homes in New York City in the last five years. Where applicable, the applicant, or its selected homeownership counseling organization, must be a HUD-approved community-based homeownership counseling and training organization.

The Neighborhood Stabilization Program was created to address the foreclosure crisis, create jobs, and grow local economies by providing communities with the resources to purchase and rehabilitate foreclosed homes and convert them to affordable housing.  NSP will also help to prevent future foreclosures by requiring housing counseling for families receiving homebuyer assistance funds through NSP.  In addition, it will protect homebuyers by requiring grantees to ensure that new homebuyers under this program obtain a mortgage from a lender who agrees to comply with sound lending practices. Last year, HUD awarded nearly $4 billion in NSP formula funds to over 300 grantees nationwide to help state and local governments respond to rising foreclosures and falling home values. Follow the link below to learn more about HPD’s application to HUD for NSP2 funds: http://www.nyc.gov/html/hpd/html/pr/NSP.shtml

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About the NYC Department of Housing Preservation and Development (HPD):

HPD is the nation’s largest municipal housing preservation and development agency. Its mission is to promote quality housing and viable neighborhoods for New Yorkers through education, outreach, loan and development programs and enforcement of housing quality standards. It is responsible for implementing Mayor Bloomberg’s New Housing Marketplace Plan to finance the construction or preservation or 165,000 units of affordable housing by 2014. Since the plan’s inception, more than 100,000 affordable homes have been created or preserved. For more information, visit www.nyc.gov/hpd

About Mayor Michael R. Bloomberg’s New Housing Marketplace Plan:

New York City’s affordable housing program to build or preserve 165,000 units of housing — enough to house half a million New Yorkers — is the most ambitious and productive in the nation—creating housing as well as jobs for New Yorkers. In April, 2010 the City reached the critical benchmark of 100,000 units financed—representing an investment of $4.5 billion to date by the City, not including roughly $5 billion in bonds issued by HDC.

Led by HPD Commissioner Rafael E. Cestero, the Plan has been recast to maintain momentum while confronting head on the economic challenges facing the City, the State, the housing industry, the financial sector and individual New Yorkers and their families. In order to fulfill the NHMP goal of 165,000 units, HPD and HDC are responding to market realities and focusing on three primary goals: strengthening neighborhoods, expanding the supply of affordable and sustainable housing and stabilizing families by keeping them in their homes. To read more about the NHMP, please visit http://www.nyc.gov/html/hpd/html/about/plan.shtml