Neighborhood Stabilization Program (NSP)

Application
Interested parties may complete and submit the application (pdf format - 63k)

Program description
On July 30, 2008, President Bush signed into law the Housing and Economic Recovery Act (HERA) of 2008, which included a number of housing provisions.  One of these provisions, Title III, has come to be known as the Neighborhood Stabilization Program (NSP).  Under NSP, Congress appropriated $3.92 billion to address the detrimental effect foreclosed and abandoned housing is having on neighborhods.  Pursuant to Congressionally-mandated formula, HUD, on September 29, 2008, published NSP regulations along with allocations to State and general local governments.  The state of Michigan was allocated a total of $263.5 million, including $98.6 million to be managed by the Michigan State Housing Development Authority (MSHDA), with the balance being directly allocated to twenty-two (22) NSP-entitlement cities.  The formula precluded Royal Oak from being a direct recipient of NSP funds; its annual CDBG entitlement is less than $2.0 million.

MSHDA has targeted $21.7 million of its $98.6 million allocation to 17 CDBG Entitlement Communities who did not receive a direct NSP allocation from HUD.  Royal Oak is one of those communities. 

At its January 12, 2009 meeting the City Commission approved a resolution authorizing the submission of an application to MSHDA requesting NSP Funding in the amount of $1.0 million pursuant to HERA.  The City's NSP application was submitted on January 23, 2009.  On July 6, 2009, the City entered into contract with MSHDA to receive an initial NSP Funding Award Grant of $250,000.  The current award amount stands at $652,595.

Part of the grant agreement allows the City to purchase foreclosed and abandoned homes, in target areas, for demolition or rehab and resale to income qualified households.  Income limits that apply to NSP requirements vary by family size.

HERA requires that at least 25% of NSP allocated funds must be used to purchase and redevelop abandoned or foreclosed-upon homes or residential properties for housing individuals or families whose incomes do not exceed 50% of area median income.

The city will use the bulk of its allocation to purchase and rehabilitate homes that have been abandoned or foreclosed upon in target areas.  NSP funds may be used to rehabilitate homes for resale to qualified homebuyers.

Status (01-13-2012):

To date, five (5) foreclosed single family dwellings have been acquired with NSP funds.  Four (4) dwellings have been rehabilitated.  Two (2) properties have been transferred to approved applicants.  Two (2) additional dwellings are scheduled for property transfer in the near future.  One (1) dwelling advertised for sale by the City of Royal Oak is also under contract.  The remaining dwelling must still be rehabilitated prior to resale.

For more information contact:

Rick Bremer, Housing Rehabilitation Officer
Housing Assistance Division
City of Royal Oak
211 Williams Street
Royal Oak, MI 48068-0064
rickb@ci.royal-oak.mi.us
P (248) 246-3133

The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, handicap, familial status or national origin.