Pursuant to the passage of the American Recovery and Reinvestment Act of 2009, more commonly referred to as the federal economic stimulus package, a total of $1.93 billion was allocated to the U.S. Department of Housing and Urban Development (HUD) for the implementation of a second round of funding for the Neighborhood Stabilization Program (NSP). The purpose of the NSP is to provide funding to state and local governments to acquire property, demolish or rehabilitate abandoned properties, and offer financial assistance to low- and middle-income homebuyers.

Unlike the first phase of NSP funding, which allocated roughly $178 million to Texas cities, counties, and non-profit associations through the Texas Department of Housing and Community Affairs, this round of NSP funding is to be provided directly from HUD to certain governmental and non-profit entities nationwide. The federal stimulus bill directed HUD to narrow the field of eligible entities to those areas with the highest need, and HUD will soon determine eligible areas using a need-calculation formula.

On May 4, HUD released its Notice of Funding Availability (NOFA) for the NSP funds provided under the federal stimulus bill. Eligible citiesÂ’ applications for NSP funding must be submitted in paper form to HUD by 5:00 p.m. on July 17, 2009. According to HUD, proposals for funding generally will be judged based on the following guidelines: (1) capacity of the lead applicant to execute projects; (2) leveraging potential; and (3) concentration of investment to achieve neighborhood stabilization.

For more details on the allocation of the NSP funds, and to access the NOFA, please visit

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