Frequently asked questions about NSP2

What is it?
NSP2 refers to the second round of funds from the Neighborhood Stabilization Program. Congress authorized this three-year grant after passing the American Recovery and Reinvestment Act of 2009 (Division A, Title XII).

The Department of Housing and Urban Development awarded NSP2 grants totaling $1.93 billion to states, local governments, nonprofits and consortiums of public and private nonprofit entities on a competitive basis. The program’s goal is to stabilize communities suffering from foreclosures and abandoned properties.

NSP2 continues the efforts begun with the first round of the Neighborhood Stabilization Program (NSP1). Congress authorized this four-year grant after passing the Housing and Economic Recovery Act of 2008 (Division B, Title III). NSP1 awarded grants totaling $3.92 billion, but only to all states and selected local governments on a formula basis.

What are the requirements of the NSP2 program?

  • Grant recipients must leverage NSP2 funds by providing funding and/or donated goods and services from nonfederal resources.
  • At least 25 percent of NSP2 funds must be used to purchase, redevelop and sell properties for people earning at or below 50 percent of the area median income.
  • NSP activities must benefit low- and moderate-income people whose incomes do not exceed 80 percent of the area median income. (HFHI’s current policy is 60 percent.)
  • All funds must be used in pre-approved census tracts that meet HUD’s criteria for targeting communities at high risk for foreclosures and abandoned properties.
  • Foreclosed homes or residential properties must be purchased with a 1 percent discount on the appraised value.
  • Fifty percent of the funds must be spent within two years after the award date, and 100 percent must be spent within three years.


What are the eligible uses of NSP2 funds?

  • Establish financing methods to purchase and redevelop foreclosed homes and abandoned properties.
  • Purchase and rehabilitate foreclosed homes and abandoned properties.
  • Establish land banks for foreclosed homes or abandoned properties.
  • Demolish blighted structures.
  • Acquire and redevelop demolished or vacant properties.


How much NSP2 funds were awarded to Habitat for Humanity International?

  • $137,620,088


How many Habitat affiliates were awarded federal NSP2 funds?

  • Seven. (Many other affiliates received NSP2 grants through local governments or other community development coalitions.)
  • These affiliates (developers) will implement the program in partnership with Habitat for Humanity International. The developers are located in five states: California, Florida, New York, Texas and Wisconsin.
  • The seven developers will collectively contribute 41 percent of the total award amount in funds and/or donated goods and services from nonfederal resources as leverage.


How will the seven affiliates use the NSP2 funds?

  • The seven affiliates will collectively create 1,062 units of long-term, affordable housing for people earning at or below 50 to 80 percent of the area median income.