Minneapolis Receives $19.5 Million in Foreclosure-Recovery Funds
Federal economic-recovery aid to help further stabilize and build a healthy housing market in neighborhoods impacted by foreclosure
January 14, 2010 (MINNEAPOLIS) — Minneapolis Mayor R.T. Rybak today announced that the City of Minneapolis is receiving $19.5 million in Neighborhood Stabilization Program (NSP) funds from the U.S. Department of Housing and Urban Development (HUD) to acquire and redevelop foreclosed properties in areas hardest hit by mortgage foreclosure.
The City submitted an application for funding with the City of Brooklyn Park and Hennepin County. The aid will also help their efforts to stabilize and rebuild communities. Saint Paul was the only other city in the state to receive funding.
The funds are authorized under the American Recovery and Reinvestment Act of 2009 and provide grants to states, local governments, nonprofits and a consortium of nonprofit entities on a competitive basis.
"We’re very pleased that the Obama administration has made available yet more critically important economic-recovery dollars for Minneapolis," said Mayor R. T. Rybak. "We will focus these new resources in the areas where they’re most needed and where they can have the most immediate impact."
The innovative consortium application stems from the work under a national pilot with the National Community Stabilization Trust (NCST), "First Look", coupled with a robust nonprofit development community that assists in rebuilding neighborhoods. Additionally, the Twin Cities Community Land Bank, a newly organized nonprofit, was established to assemble, manage and dispose of property for the purpose of stabilizing neighborhoods.
"NSP funding provides critical assistance as our communities fight back from the effects of foreclosure," said Hennepin County Board Chair Mike Opat. "We are very grateful to HUD and the federal government for continuing our successful partnership."
"We are pleased with HUD’s announcement of the NSP award for the Minneapolis, Hennepin County and Brooklyn Park consortium," said Robert Schreier, director of Community Development for the City of Brooklyn Park. "These dollars will be critical in helping the City of Brooklyn Park continue to improve our most challenged neighborhoods."
Minneapolis is allowed to use the funds to purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed, and to purchase and demolish properties to hold the vacant land for future redevelopment in order to stabilize neighborhoods impacted by foreclosures. Funding can also be used to establish financing programs for homeowners or developers to purchase foreclosed residential properties. The spending plan will be approved by the City Council in February.
"Minneapolis is a national leader in neighborhood foreclosure-recovery strategies and the federal dollars that we have received have allowed us to leverage millions in additional dollars to continue our progress," said Tom Streitz, director of Housing Policy and Development for the City of Minneapolis. "We are seeing real improvement and stabilization in the neighborhood housing markets across Minneapolis," he added.
In 2008, the City of Minneapolis was awarded $14 million in federal Neighborhood Stabilization Program funds for purchasing, re-developing, and rehabilitating foreclosed and abandoned properties.
• $500,000 for the establishment of financing mechanisms and to purchase and redevelop foreclosed homes and residential properties.
• $6.5 million for nonprofit purchase rehab and the support of the "First Look" program, the national pilot project launched in Minneapolis to coordinate the transfer of real estate-owned properties from financial institutions nationwide to local housing organizations, in collaboration with state and local governments.
• $4.3 million for acquisition of vacant foreclosed properties that are not candidates for rehabilitation, demolish them, and hold them as vacant parcels until the market is ready.
• $1.7 million for demolition of blighted structures.
• $1 million for program administration.
Published Oct. 14, 2010