Feds say money available...not much evident yet

The feds made nearly $6 billion available for the Neighborhood Stabilization Program, which intends to combat blight by reducing the number of foreclosed homes on the market.
The money, which has only started to flow during the past few weeks despite much of it being authorized last summer, will go to state and local housing authorities and non-profit organizations involved in providing housing for middle- and low-income families.

"The NSP was designed to help deal with all the properties in foreclosure around the nation," said Antonio Reilly, executive director of the Wisconsin Housing and Economic Development Authority (WHEDA), which will administrate the program in several counties in the state.
The bulk of the NSP funds will come from the $3.92 billion that was approved as part of the Housing and Economic Recovery Act of 2008 passed in August.

By regulation, these funds must be spent in communities with the highest incidences of foreclosures and subprime loans. That would likely include Detroit. They'll go to helping households earning no more than 120% of the median income of the local area, with 25% of the money going to families earning less than half the median.

There will also be a lease-to-own program. And there'll be a program in which the department will buy and rehab housing, mostly single-family homes and condos, to rent out to low-income families. All told, about 300 homes will be put back on the market in Las Vegas.

In some hard-hit towns, such as Cleveland and Detroit, where many of the vacant foreclosed houses have already be so damaged by vandalism and nearby home values are extremely low, authorities want to use the money to demolish derelict houses. The lots will go into a land bank for later development when neighborhoods recover.

Even before the first round of spending has filtered down to help many families buy homes, a second round of NSP funding is is poised to enter the pipeline. This money was approved as part of the Recovery and Reinvestment Act of 2009 (stimulus plan) that was signed into law in February.

It provides $1.93 billion to be allocated on a competitive basis. Potential grantees will be non-profits like community development organization certified by the U.S. Treasury Department.
They'll be judged on, among other things, their abilities to execute projects, how well they can leverage the money and how well the plans they offer can work to stabilize neighborhoods.
A third allocation, called NSP-TA, of $50 million provides cash to pay for technical assistance in running programs funded by the first two rounds of cash.

There has certainly been press about these programs, but little on the street to show for them locally, so far. I've seen articles about various local communities receiving the funding and there have been a few articles in local papers, but I have yet to meet a single buyer who has benefited. Perhaps the first round of funding went to line the pockets of local politicians and maybe we'll see some real benefits in subsequent rounds. A few million dollars can disappear very fast locally, with no one really sure where it went. After all, they spend more than that on travel budges locally without any receipts required. You gotta love Detroit area politics.