New York, NY – April 14, 2009 – (RealEstateRama) — Governor David A. Paterson today announced the award of $59 million in Neighborhood Stabilization Program (NSP) grants to assist communities affected by the foreclosure and subprime mortgage crises. The NSP awards will be distributed to 29 projects throughout the State, allowing for the purchase and redevelopment of foreclosed and abandoned properties. The Governor made the announcement in the Village of Hempstead with Nassau County Executive Tom Suozzi.The awards follow a competitive Request for Proposal process during which organizations were invited to apply for NSP funds. The State housing agencies that comprise NYHOMES selected 29 applicants across New York that represent a cross-section of local affordable housing providers. The grants are available through a combination of federal and State funds.
“The shuttering of homes has devastated too many of our communities, but with these awards through the Neighborhood Stabilization Program, we have the opportunity to revitalize New York’s villages, towns and cities,” Governor Paterson said. “The funds will help us address the foreclosure and subprime crises by providing effective tools to protect property and promote affordable housing.”
“Nassau County has had more than 6,000 foreclosure filings, and we are being affected more and more every day by the economic crisis that the nation is experiencing. The Neighborhood Stabilization Program funding will enable us to provide some relief to communities that were hardest hit by the foreclosures,” County Executive Suozzi said. “We are going to do what we can to not only help residents avoid the loss of a home, but to also stop the decline in the value of neighboring properties.”
Nassau County has been severely impacted by the foreclosure crisis and witnessed a 25.8 percent increase in foreclosure filings from 2007 to 2008. The County will use its nearly $3.1 million NSP grant to finance renovations and subsidize the purchase prices of six foreclosed properties located in areas hit hardest by the foreclosures.
The projects to receive grants fall into five categories of uses: Acquisition and Rehabilitation, 79 percent of total awards allocated; Homebuyer Assistance, 5 percent of total awards allocated; Land Banking 1 percent of total awards allocated; Demolition of Blighted Properties, 3 percent of total awards allocated; and Redevelopment of Vacant Properties, 12 percent of total awards allocated.
President and Chief Executive Officer of NYHOMES Priscilla Almodovar said: “The Neighborhood Stabilization Program is part of a comprehensive strategy to stem the tide of foreclosures and provide affordable housing for renters and homebuyers. It will enable us to repair not just individual homes, but entire neighborhoods one block at a time. It also gives us the resources to put new homeowners in these renovated homes–and first-time homebuyers are the key to fixing the housing crisis and bringing us out of the economic recession.”
Superintendent of Banks Richard H. Neiman said: “Long Island has been hit hard by the foreclosure crisis. New York has focused its efforts on outreach, legislation and enforcement to address this crisis throughout the State. As Chair of the Governor’s HALT Task Force, we have partnered with other State agencies, to work closely with local non-profit organizations, including housing counselors and legal service providers, to reach homeowners in trouble and help avoid unnecessary foreclosures. Where foreclosure can’t be avoided, it is important to rehabilitate foreclosed and abandoned homes to protect the neighborhood and preserve property values in the surrounding areas.”
Commissioner of the New York State Division of Housing and Community Renewal Deborah VanAmerongen said: “Today’s awards will go a long way toward increasing access to affordable housing and ensuring the vitality of communities impacted by the foreclosure crisis. Under Governor Paterson’s leadership, New York State has developed a multi-faceted plan to lessen the blow of foreclosure on families and neighborhoods, including placing foreclosure prevention service providers in every county of the State to help prevent unnecessary foreclosures. Where it is not possible to prevent foreclosure from going through, the Neighborhood Stabilization Program will help assure that properties are restored and neighborhoods are protected.”
U.S. Department of Housing and Urban Development (HUD) Deputy Regional Director in the New York Regional Office JoAnna Aniello said: “HUD would like to applaud the speed and efficiency New York State has shown in directing these monies to communities with the greatest needs and I wish to congratulate Governor Paterson and his staff for this effort. Strengthening communities is what the Neighborhood Stabilization Program is all about, and putting these monies to work quickly helps us achieve this very goal. Similarly, I also wish to congratulate Nassau County Executive Tom Suozzi for his creativity in purchasing and renovating six foreclosed properties. This is the first partnership of its kind in the nation between government and a leading lending institution, and will further help to protect neighborhoods at risk.”
In compliance with federal requirements, all households to receive NSP funds report an income at or below 120 percent of the local Area Median Income (AMI). In addition, 27 percent of the funds target low-income households at or below 50 percent of the AMI. Additional Federal NSP funds are expected to be made available on a competitive basis later this year from funding included in the Federal stimulus legislation. Federal guidelines on how those funds will be distributed are expected to be released next month.
The NSP grants are part of Governor Paterson’s commitment to addressing the foreclosure and subprime crisis in New York. The Governor’s Halt Abusive Lending Transactions (HALT) Task Force has led the coordination of foreclosure assistance and prevention efforts. In June 2008, the Legislature passed the Governor’s subprime legislation that instituted progressive changes to the foreclosure legal process, including requiring lenders to give borrowers 90 days notice before initiating foreclosure proceedings. This legislation also included $25 million that DHCR has awarded to local not-for-profit organizations to provide foreclosure prevention services. Similarly, the New York State Department of Banking has awarded $2 million for a grant program for consumer credit counseling and legal services. NYHOMES has distributed $2.56 million in grants funded with federal and State resources to provide counseling and legal assistance to homeowners at risk of foreclosure.
NYHOMES is comprised of three State agencies that function as New York’s housing bank and include the New York State Housing Finance Agency (HFA), which was created in 1960 to sell bonds to finance the construction and rehabilitation of multi-family affordable rental housing in New York State; the Affordable Housing Corporation, a subsidiary of the HFA, which was established in 1985 to promote homeownership by low- and moderate-income households; and the State of New York Mortgage Agency, which was created in 1970 with the mission of helping low- and moderate-income families become homeowners.
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Additional quotes provided in support of the Neighborhood Stabilization Program include:
U.S. Senator Charles E. Schumer said: “The subprime mortgage crisis has ravaged the economy, caused numerous foreclosures and severely impacted property values, which is why we need weapons like the Neighborhood Stabilization Program to attack it. This plan to purchase, renovate and re-sell foreclosed properties across the State is just what we need during these challenging economic times. These funds go a long way in stimulating the economy, creating jobs, and helping homeowners.”
U.S. Senator Kirsten E. Gillibrand said: “Redeveloping and revitalizing our communities is an essential part of our economic recovery. During these tough economic times, it’s important that we invest in rebuilding foreclosed and abandoned homes in our neighborhoods. These federal dollars will promote local economic growth and create jobs right here at home. I will continue to work with Senator Schumer and the New York Congressional Delegation to ensure New York continues to receive these critical funds.”
Congressman Brian Higgins said: “Strong and stable neighborhoods are the foundation of every community. One vacant home has the potential to negatively impact an entire street. This funding will go a long way toward improving struggling communities in Erie and Chautauqua Counties.”
Congressman Maurice Hinchey said: “By rehabilitating foreclosed and abandoned homes, we are helping to strengthen communities across the State. In addition to resulting in millions of foreclosures across New York and the entire country, the housing crisis is contributing to the decline of property values — the foundation of the middle class’ wealth. When a neighbor’s home is foreclosed upon, the value of other homes in the neighborhood takes a hit. By stabilizing the housing market and ridding neighborhoods of vacant homes, we will help reduce crime, enhance community life, stabilize the housing market, and enable new families across the State to become responsible homeowners.”
Congresswoman Nita Lowey said: “When families abandon their homes or are forced out through foreclosure, nobody wins. Foreclosure and abandonment contribute to neighborhood blight and can drive down property values in the surrounding community. I am pleased Westchester County will receive more than $7 million to confront this severe problem.”
Congresswoman Carolyn McCarthy said: “I applaud Governor Paterson’s release of funding for the Neighborhood Stabilization Program and his efforts to help stem the foreclosures in Nassau County. Long Island has been hit particularly hard by the foreclosure crisis and this funding will help to bolster initiatives to keep homes from falling into foreclosure and keep property values stable.”
Congresswoman Louise M. Slaughter said: “This housing crisis has taken a toll on too many homeowners and neighborhoods, as well as our economy. The funding made available by the Neighborhood Stabilization Program is critical for communities who are struggling with the damaging effects of foreclosure and declining property values. These dollars will go a long way to support homeownership, rebuild neighborhoods, and strengthen our communities and economy.”
State Senator Pedro Espada, Jr., Chairman of the Senate Standing Committee on Housing Construction and Community Development, said: “This represents a significant and meaningful response by the Governor and State government to the foreclosure crisis where foreclosure has been unavoidable. This $59 million in funding will help stabilize neighborhoods and create affordable housing through rental and home-ownership opportunities for residents across the State.”
Village of Hempstead Mayor Wayne J. Hall, Sr. said: “I am delighted to join Governor Paterson in his announcement to help families in our community who have fallen victim to the subprime crisis and predatory lending practices. Hempstead has been one of the many villages that have been hit hard by foreclosures and subprime. This program will provide our Village an opportunity to revitalize and develop further.”
Contact: Errol Cockfield | errol.cockfield (at) chamber.state.ny (dot) us | 212.681.4640 | 518.474.8418
NYHOMES Contact: Philip Lentz | plentz (at) nyhomes (dot) org | 212-872-0679
