Illinois Department of Human Services and US Department of Housing and Urban Development Officially Launch Program to Help Stabilize Neighborhoods

From the Illinois Department of Human Services

CHICAGO – As home foreclosures across the nation and state reach record levels and abandoned and foreclosed homes threaten the stability and economic health of Illinois neighborhoods, Illinois Department of Human Services’ (IDHS) Secretary, Dr. Carol L. Adams, today announced the signing of the agreement for the Neighborhood Stabilization Program with the US Department of Housing and Urban Development (HUD). The State of Illinois Neighborhood Stabilization Program (NSP) will provide $53 million in emergency assistance to local governments, developers, and non-profit organizations to acquire, redevelop, or resell foreclosed properties that might otherwise become sources of abandonment and blight within their communities.

Illinois is the only grantee to specifically address the needs of the State’s priority populations by setting an aggressive goal of using up to 40% of it’s allocated funding for developments that provide affordable and/or accessible homes for very low-income households and persons with disabilities. As the lead agency, IDHS will work in partnership with the Illinois Housing Development Authority (IHDA), the Illinois Department of Commerce and Economic Opportunity (DCEO) and affordable housing advocates to help redevelop communities and address the housing needs of the State’s most vulnerable residents. IDHS’s main goals are to allocate resources to communities that were the hardest hit by foreclosure and to provide affordable rental housing and homeownership opportunities for low-income individuals and persons with disabilities.

“The devastation of foreclosures affects not only the homeowner, but the entire neighborhood. The impact of foreclosures can devastate a community and has the potential to cause its rapid deterioration. IDHS is happy to partner with other state agencies to begin to take the necessary steps to address the unprecedented crisis facing this country. These neighborhoods need our help and we are making sure that they have the resources they need to get out of this crisis,” said IDHS Secretary, Carol L. Adams, Ph.D.

“The Neighborhood Stabilization Program is an important federal resource essential in the effort to restore communities and create opportunities for affordable housing. The Illinois Housing Development Authority will bring our expertise in housing development and mortgage finance to partner with IDHS to implement the Illinois Neighborhood Stabilization Program, and begin the task of eliminating blight created by the foreclosed and abandoned properties statewide,” said IHDA Executive Director DeShana L. Forney.

Illinois’ efforts under the Neighborhood Stabilization Program will help reinvigorate distressed neighborhoods by providing funds to address foreclosed and abandoned properties that can be rehabilitated for resale, converted into affordable housing and related uses. Grantees can also create financing products to help low- to-moderate-income homebuyers purchase an abandoned and foreclosed home, namely persons with incomes of 120 percent of the area median income as defined by HUD.

The federal Housing and Economic Recovery Act of 2008 was signed into law on July 30, 2008. Among its incentives is the Neighborhood Stabilization Program, a one-time funding program to provide emergency assistance to state and local grantees to address abandoned and foreclosed homes. The legislation authorizes up to $3.9 billion nationally for the acquisition, rehabilitation, and demolition of foreclosed and abandoned properties and will help communities to eliminate blight, control crime and stabilize property values.

“Through the Neighborhood Stabilization Program, HUD will try to support, not just localized efforts, but regional and other innovative efforts, like we are seeing in Chicago and other places that are bringing municipalities together to attack the problem of foreclosed homes and their devastating impact on communities,” said HUD deputy regional director Beverly Bishop.

The State is currently soliciting proposals for projects for the NSP program. Interested persons can access the complete Request for Proposals package from the State of Illinois Procurement Bulletin at http://www.purchase.state.il.us. Eligible applicants include Community Action Agencies, For Profit Developers and Organizations, Non-profit developers, Units of Local Government including Municipalities, Counties and Housing Authorities. The application deadline is May 4th, 2009 at 5:00 pm. For more eligibility information, potential applicants can visit http://www.dhs.state.il.us/nsp.