Louisiana Receives Approval from HUD for Neighborhood Stabilization Plans

Baton Rouge, LA (January 8, 2009)- The U.S. Department of Housing and Urban Development (HUD) has approved the state’s plans for participation in the federal Neighborhood Stabilization Program, clearing the way for more than $36 million dollars in grants to help communities address problems caused by high foreclosure rates and blight.

HUD Secretary Steve Preston, while in New Orleans for the groundbreaking of the new C.J. Peete Redevelopment, made the announcement of the approval of the state’s plans to use the funds. Of the total amount, $2.3 million will be kept in New Orleans, with the balance being spread across the state.

The Neighborhood Stabilization Program was created under the Housing and Economic Recovery Act of 2008 and provides nearly $4 billion nationally, with funds going to every state and certain local communities to address problems with high foreclosure rates and instances of abandonment and blight. HUD has outlined acceptable uses for the funds and asked that proposed uses for the funds be submitted for review. HUD awarded Louisiana funds through the Office of Community Development’s (OCD) Disaster Recovery Unit. The Louisiana Housing Finance Agency (LHFA) will administer the funds as a subgrantee of OCD.

Following a series of public meetings across the state, staff from the LHFA put together an action plan outlining proposed uses for the funds. The state submitted the plan to HUD on December 1, 2008. The plan allows for the acquisition and rehabilitation of rental developments and single family homes, homeownership assistance and homebuyer education and training.

With HUD’s approval now in hand, the LHFA is preparing the application documents for potential grantees to use to apply for the funds. This process will be open to individuals, groups, and municipalities, non-profit and for-profit developers. The LHFA’s Board of Commissioners and OCD will score the applications. The state anticipates it will release application and scoring criteria by the end of January.

“The Neighborhood Stabilization Program will have a direct effect on our communities that are facing foreclosures and declining property values,” said LHFA President Milton Bailey. “We are very pleased to have HUD recognize and approve our proposal and we plan to get this program moving as quickly as possible.”

"In Louisiana, the threat of foreclosed and abandoned homes has profoundly impacted our neighborhoods since the hurricanes of 2005 and 2008," said Paul Rainwater, OCD executive director. "I thank Secretary Preston for his continued support of Louisiana. This effort, when coupled with our work to eradicate blight in areas affected by hurricanes, is vital to improving our communities, overcoming the current economic problems we face and creating vibrant neighborhoods that are full of life and activity."

The Louisiana Housing Finance Agency (LHFA) was created by the Louisiana Legislature to address the shortage of safe and affordable housing in Louisiana. Since 1980, LHFA has administered federal and state funds through programs designed to advance the development of energy efficient and affordable housing for low and moderate income families. Post-Katrina, LHFA has been a viable resource in the development of rental housing and homeownership finance opportunities.

Contact:
Jeff DeGraff
Public Information Director
(225)763-8771
jdegraff@lhfa.state.la.us

Christina Stephens
Office of Community Development
225.342.1790
Christina.stephens@la.gov