A consortium of Hennepin County and the cities of Minneapolis and Brooklyn Park recently received $19.4 million in American Recovery and Reinvestment Act (economic stimulus) funding for neighborhood stabilization.
The funding is part of $2 billion for foreclosure recovery awarded by the U.S. Department of Housing and Urban Development (HUD) to states, local governments and nonprofit housing developers under the second round of HUD’s Neighborhood Stabilization Program funding. The program is designed to help communities recover from the collapse of the housing markets.
There were 482 applicants nationwide, requesting more than $15 billion. Fifty-six grants were distributed to 28 states. Minnesota communities received a total of $37.5 million – the $19.4 million to Hennepin, Minneapolis and Brooklyn Park; and $18 million for St. Paul.
Grants were awarded for the most innovative ideas to rebuild local communities, create new job opportunities, provide immediate relief and help lay a foundation for long-term economic growth.
“This funding provides critical assistance as our communities fight back from the effects of foreclosure,” said Hennepin County Board Chair Mike Opat. “We are very grateful to HUD and the federal government for continuing our successful partnership.”
Minneapolis was the lead applicant for the funding, along with Hennepin and Brooklyn Park. The exact allocation of funds to the three entities has yet to be determined. The consortium will target neighborhoods in up to 73 census tracts hardest hit by foreclosures and declining property values. The consortium proposes to use the funds for down-payment and closing-cost assistance to approximately 150 homebuyers to purchase foreclosed properties, purchase and rehabilitate approximately 145 foreclosed or abandoned units, land-bank approximately 120 foreclosed properties, and redevelop approximately five demolished or vacant units.
Property buyers must be at or below 120-percent of area median income ($100,700 for a family of four), with 25 percent of the funds for households at or below 50 percent of median income ($41,950 for a family of four).
The consortium is part of a pilot community collaboration with the National Community Stabilization Trust, which facilitates acquisition of foreclosed properties at a substantially reduced price. The goal of the consortium is to achieve neighborhood stabilization through arrested decline in home sales, increased sales of residential properties, increased median market values, and removal of vacant and abandoned properties.
The consortium anticipates leveraging up to an additional $37.4 million in other funding for neighborhood stabilization.
