NSP - Neighborhood Stabilization Program

Congress established the Neighborhood Stabilization Program (NSP) for the purpose of stabilizing communities that have suffered from foreclosures and abandonment. Through the purchase and redevelopment of foreclosed and abandoned homes and residential properties, the goal of the program is being realized.


Eligible Activities

NSP funds may be used for activities which include, but are not limited to:

  • Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties;
  • Purchase and rehabilitate homes and residential properties abandoned or foreclosed;
  • Establish land banks for foreclosed homes;
  • Demolish blighted structures;
  • Redevelop demolished or vacant properties

In addition, the use of NSP funds must also meet one of the following CDBG national objectives:

  • Housing Activities: Providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income.
  • Area Benefit Activities: Benefiting all the residents of a primarily residential area in which at least 51% of the residents have incomes at or below 120% of area median income.
  • Limited Clientele Activities: Serving a limited clientele whose incomes are at or below 120% of area median income.

NSP grantees develop their own programs and funding priorities. However, grantees must use at least 25% of the funds appropriated to house individuals or families whose incomes do not exceed 50% of the area median income. Activities may not qualify under NSP using the CDBG "prevent or eliminate slums and blight" or "address urgent community development needs" national objectives.