In 2008, Congress passed the Housing and Economic Recovery Act (HERA) which created the Neighborhood Stabilization Program (NSP). The NSP program allocated $3.92 billion to communities and states across the nation to address the growing foreclosure problem and stabilize neighborhoods. Hesperia was allocated $4.59 million in NSP grant funds to address increasing foreclosures.
Allocations of the NSP funds were based on the number and percentage of:
Homes financed by a subprime mortgage
Homes in default or delinquency
The NSP provides emergency assistance for the redevelopment of abandoned and foreclosed residential properties. Eligible activities include financing mechanisms for purchase of foreclosed homes, purchase and rehabilitation of foreclosed or abandoned homes, land banks for foreclosed homes, demolition of blighted structures and redevelopment of demolished or vacant property.
All NSP funds are to be used to benefit individuals and families whose incomes do not exceed 120% of area median income. However, 25% of the NSP funds must be used for housing that is affordable to individuals and families whose incomes do not exceed 50% of area median income. Homes must be purchased at a 1% below appraised value, per NSP requirements. The NSP effort will provide affordable housing opportunities and arrest blighting conditions caused by foreclosures.