PROVIDENCE – Rhode Island neighborhoods that were hit hard by the foreclosure crisis have been awarded $6.3 million in funding, said the U.S. Department of Housing and Urban Development on Wednesday.
The grants represent a third round of funding through HUD’s Neighborhood Stabilization Program. Rhode Island already has received $19.6 through the program. The funds will provide targeted emergency assistance to help local communities “acquire, redevelop or demolish” foreclosed properties, the organization said.
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Providence was specifically allotted $1.3 million, and the state will receive $5 million.
“These grants will build on local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said Shaun Donovan, HUD secretary. “We wanted to make certain that we target these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight. This investment will reduce blight, bolster neighboring home values, create jobs and produce affordable housing.”
The NSP 3 allotment will allow grantees an exclusive 12- to 14-day window to bid on properties, as allowed under the First Look partnership with the National Community Stabilization Trust, announced by Donovan last week. First Look aims to cut in half the traditional 75- to 85-day process it takes to re-sell foreclosed properties and increase the likelihood that the properties that communities choose to buy are strategically chosen.
State and local governments may use the funds to acquire property, demolish or rehabilitate abandoned buildings and offer closing cost or down-payment assistance to low- to moderate-income homebuyers. Additionally, the grantees can create land banks to temporarily manage and dispose of vacant land for the purpose of encouraging urban redevelopment, said HUD.
The third round of funding announced Wednesday by the federal government is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act; the legislation provides for a $1 billion Emergency Homeowners Loan Program for homeowners at risk of foreclosure due to an involuntary reduction in their income.
The two other rounds of NSP funding were provided under the Housing and Economic Recovery Act of 2008, allotting $3.92 billion in national funding, and the America Recovery and Reinvestment Act of 2009, appropriating $2 billion.
