Billion$$$ for the Neighborhood Stabilization Program

Here we go again…Another Federal program designed to redevelop foreclosed & abandoned properties in blighted areas. Is it successful?

Even though some communities have bought, renovated them and sold foreclosed homes to low income buyers, or have demolished some blighted areas, there have been some communities that received promise of grants who haven’t done much at all with the available funds.

There are some local and state officials who are unable to use the federal funds due to the constantly changing program guidelines and rules to use the money. A recent AP article stated that only 38% of the money has been “obligated” or dedicated —- backed up by a legal contract for the property. The funds have to be obligated by September 2010 or the money will be taken back by the Feds (and probably spent somewhere else instead of paying off debt or just reducing the budget by that amount).

NOTE: Fat chance for reducing the debt according to Jamie Dupree’s blog about where the unobligated money “really” goes. –

Examples of problems include Boyton Beach, Florida where $11,000 of the $3 million grant has been spent. The local governments are not establishing relationships with the banks before sophisticated “private sector” investors are buying up properties before the local government officials can even bid on them…

Wait, government too slow for the free market? No!

3-17-2011:  House of Representatives – H.R. 861 (Elimination of Unallocated Release of NSP Funds) was rejected…so in other words, Congress didn’t agree to release these funds back to the US Treasury, but to go ahead and allocate them.

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