Economy

The housing market has been in a lot of trouble since it crashed in 2008. With millions of workers losing their jobs and homeowners going into foreclosure at every turn, many neighborhoods were left all but vacant.

The government responded to the troubled market by developing the Neighborhood Stabilization Program (NSP), a program meant to help renovate foreclosed homes and offer public housing options. Now many organizations around the country are working hard to provide affordable housing to individuals and families in need.

HUD's Neighborhood Stabilization Program (NSP)

The Housing and Urban Development's (HUD) NSP was authorized by Title III of the Housing and Economic Recovery Act (HERA) of 2008 to stabilize communities that have foreclosed or abandoned homes, or carry some among the 2.5 million nationwide in the foreclosure process. The program authorized $3.92 and $1.93 billion for the NSP1 and NSP2 programs, respectively, and were to be distributed to winning applicants from states, local governments and nonprofits to renovate homes in their communities.

Those communities that won grant money were to:

• Allocate at least 25 percent of the funds for purchase and redevelopment of abandoned or foreclosed homes, which were to be used to house individuals or families whose incomes do not exceed 50 percent of the area median income (AMI).
• Make sure all allocated funds benefit low- and moderate-income people whose income does not exceed 120 percent of AMI.

If used appropriately, the funds would help the communities buy foreclosed properties then resell or rent them at affordable prices, helping thousands of individuals and families.

Communities are Taking Advantage of the Program

Several communities around the country lined up for use of the NSP funds in 2009. For instance, in Sonoma County, Calif., several organizations were vying for NSP funding through the Sonoma County Community Development Commission to help low-income individuals and families - as well as the homeless and veterans - move into affordable housing, as well as house mental health patients.

In Colorado's city of Pueblo, $1.87 million was awarded for the purchase and rehabilitation of three abandoned/vacant multi-family buildings to place veterans in permanent, affordable rental housing. Also, the city allocated $1.04 million to assist in the purchase and redevelopment of five "blighted" homes, as well as the rehabilitation and resale of three homes, both of which would be used for households at 120 percent AMI and below.

Many other states and communities around the country have received funds to help revive areas either high in foreclosure or job loss.

A Few Glitches in the System

While the program was created to successfully rehabilitate neighborhoods, some communities have run into problems getting the job done. According to a September CNN article, some problems include:

• Too much red tape: Before state and local governments can see any money, they must tell HUD how and where they plan to use the funds then conduct extensive contractual work with banks and developers. For some organizations, this is more than they're used to handling and is slowing progress toward meeting their 18-month deadline.
• Competition for the properties: Some organizations have struggled to purchase foreclosed homes because they're losing out to private investors. For example, in South Florida, many lenders bypassed government funds that required organizations to pay as low as 2 percent below a home's appraised value, instead opting to work with investors eager to pay lender prices.
• Other requirements: Many of the homes that are actually purchased and rehabilitated don't count toward the requirement that 25 percent of funds must be spent on very low-income families, meaning that some state and local officials are having to target specific neighborhoods, limiting the program's effectiveness.

Solutions on the Horizon

While there have been a number of issues with the program, there are solutions on the horizon, including NSP-TA, a program created in conjunction with NSP1 and NSP2 to provide technical assistance to grantees having problems navigating the process. Also, Enterprise Community Partners, Inc. and other nonprofit groups created the National Community Stabilization Trust, which offers grantees access to foreclosed homes before they hit the market. The trust lined up a $50 million low-interest credit line for grantees to acquire homes.

Ali Solis, senior vice president and public policy and corporate affairs senior executive for Enterprise Community Partners, Inc., noted in a guest blog that the program recently received an additional $2 billion for NSP2.

Since the program is still new, it's hard to gauge the rate of success yet. But with communities actively taking advantage of the program, there's hope that many individuals and families will benefit from new and affordable housing in the months and years to come.

If you're interested in NSP housing options, contact your state housing department for eligibility requirements and availability in your area.

Recently, CNNMoney.com asked Americans if they would be interested in helping to pay down the national debt, and the answer seemed to be a resounding "No!"

However, there is indeed a $12 trillion debt to pay down, and Uncle Sam is looking for Americans to make tax-deductible donations to help reduce it. Will you help?

U.S. Debt Donations: Not a New Concept

This may be the first time you've heard of making a donation to pay down the U.S. debt, but this is actually a nearly 50-year-old concept. Since 1961, Americans have been donating millions under the "gift to reduce the public debt" program.

In fact, the program has seen some of its biggest contributions in the past three years. And so far in 2009, the program has seen $3.1 million in total contributions - the largest in at least 10 years (the biggest total contribution year prior to 2009 was in 1994 when $2.4 million was donated).

You're Asking Me to Donate?

Of course, just because some people are donating doesn't mean everyone will. To prove this theory, CNNMoney.com recently took a team to New York's streets to see if anyone would take interest in donating to the fund. The answers the team received ranged from "They can use my tax dollars to do that and work it out," to "Hell no."

Not everyone is turned off by the idea of donating, however, which is probably why many people contribute regularly or even leave their estate to the fund when they die. If you are interested in donating, you could visit the Treasury Department's Bureau of Public Dept and check the FAQ section. Or you could find information on page 91 of the IRS' 2009 Instruction Booklet for Form 1040.

Just keep in mind that the amount donated each year is said by experts to not put a deep or lasting dent in the debt. In other ways, you may want to consider saving your own money for an uncertain future rather than help to pay down the national debt.

Would you give a donation to help pay down the U.S. Debt?

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