Thursday, March 26, 2009 | midnight
To help contain foreclosures in California, Florida, Arizona, and Nevada, Congress recently enacted legislation authorizing $4 billion for the U.S. Department of Housing and Urban Development to establish the Neighborhood Stabilization Program.
HUD has designated $4.1 million of these funds to the city of Henderson in order to carry out specific programs. The city’s Neighborhood Services Division is working to refine guidelines and requirements before the program is implemented in the coming weeks.
“Neighborhood Services has worked to identify areas hit hardest by foreclosures as targets for the program,” said Councilwoman Gerri Schroder. “Under the NSP, those eligible Henderson participants can receive funds to help purchase, repair and live in previously foreclosed homes. This helps to put people in homes.”
Henderson residents interested in participating must meet specific eligibility criteria, such as demonstrating they have occupied the residence for a certain period of time and a willingness to complete at least eight hours of counseling through a HUD-certified housing counselor.
Eligible applicants must also be at or below 120 percent of area median income. AMI limits are based on HUD estimates of family income, with adjustments for family size. Once determined eligible, applicants can use NSP funds for down payment assistance, closing costs and minor rehabilitation to the property.
Guidelines that already are adopted include unallowable uses of funds, such as preclusion if the participant owns another house or property or subleases the property being assisted with NSP funds. Funds may also be disallowed for the purchase of luxury items.
In addition to individuals, nonprofit organizations also may receive funding to acquire, rehabilitate and rent foreclosed properties. The city will soon issue a Request for Proposal to 501(c)(3), 501(c)(4) and Section 905 nonprofits that have been operating for at least two years, to administer a Homebuyer Assistance Program according to NSP guidelines. Properties acquired by nonprofits with NSP funds must rent to tenants at or below 50 percent AMI in partial fulfillment of HUD requirements.
The city will have 18 months from the date of the award to distribute the $4.1 million. According to HUD, the program is an important first step in reversing the effects of foreclosures by stabilizing neighborhoods. Additional information for this program is available by visiting cityofhenderson.com or calling the Neighborhood Services Division at 267-2000.