Minneapolis receives $19.5 million in Recovery funds for foreclosure help
The City of Minneapolis has been awarded $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 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.
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 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.
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.
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.
Jan. 14, 2009
Published Jan 14, 2010