Plan to Utilize Neighborhood Stabilization Program Funds Approved
Posted by Jean Greaux on April 6, 2009 at 3:45 PM AST

Governor de Jongh said earlier today that the U.S. Department of Housing and Urban Development has awarded almost $580,000 to the U.S. Virgin Islands to be used in the Neighborhood Stabilization Program (NSP) which was created to assist in the redevelopment of abandoned and foreclosed homes. 

de Jongh said the Virgin Islands Housing Finance Authority (VIHFA) will use the Neighborhood Stabilization Funds to purchase and redevelop foreclosed homes and residential properties:

“NSP Funds will be used to create housing, retain jobs, or serve a limited clientele and it will benefit persons whose household incomes do not exceed 120 percent of the area median income. Since the Authority’s mandate is to provide clean, safe and sanitary homeownership opportunities to persons with low and moderate income, the Authority already has a list of persons that would qualify under this program.”

The Neighborhood Stabilization Program was created under the Housing and Economic Recovery Act of 2008 (HERA) for the purpose of assisting in the redevelopment of abandoned and foreclosed homes. Funds have been allocated to jurisdictions based on a formula incorporating data regarding the number of home foreclosures, homes financed with sub-prime loans, home default or delinquency rates.

Funds provided under NSP are considered as special allocation of Community Development Block Grants for Fiscal Year 2008. Given that NSP grants are construed as CDBG Funds, the NSP grant is subject to CDBG Program requirements- except where some of the requirement have been waived or altered specifically for the NSP, de Jongh said.

According to Housing Finance Authority Executive Director Clifford Graham, the following are the programs the Authority will implement when the NSP grant funds are received:

• Acquisition of properties foreclosed on to create a pool for low and moderate income families and individuals to repurchase.

• Renovate and rehabilitate these foreclosed properties with HOME funds and sell to HOME eligible clients.

• Purchase a foreclosed property to provide housing as a shelter for individuals who are homeless through the Continuum of Care.

Graham said the Housing Finance Authority is prepared to use these funds to specifically buy back properties, rehabilitate and resell or rent to persons who meet the eligibility requirements.

Additionally, de Jongh said, the Authority will set aside at least ten 10 percent of NSP funds to provide funding for the creation of a homeless shelter through the Continuum of Care:

“Since the Authority works closely with the Continuum of Care, it will provide funding for homeless shelter through consultation to these organizations.