Enterprise Community Partners:
Summary of HUD Neighborhood Stabilization Program Notice
On September 29, 2008, HUD released a Notice outlining the procedures and requirements for the
Neighborhood Stabilization Program (NSP) which was established as part of the Housing and Economic
Recovery Act of 2008. All CDBG statutory and regulatory requirements apply other than the waivers and
alternative requirements specified in the Notice. Below is a summary of the provisions of the Notice,
organized in a question-and-answer format, that was adapted from a briefing paper produced by CHAPA.
Clarification is being sought from HUD on certain provisions of the Notice, which are indicated below by
asterisks. Read the HUD Notice.
How were the funds allocated?
- Grants were targeted to approximately 300 cities, counties, and states. The formula allocated
70% of the funds based on the number and percent of foreclosures, 15% for subprime loans,
10% for loans in default (delinquent 90 days or longer), and 5% for loans delinquent 60 to 90
- The statute required that each state receive a minimum of 0.5% of the total ($19.6 million).
After reserving $19.6 million for each state, HUD calculated how much of the remaining state
amount CDBG entitlement and non-entitlement areas would receive under the formula. To
ensure targeting to areas of greatest need, HUD limited direct allocations to those localities
owed at least $2 million under the formula and allocated the balance to the State to assist all
- View the Allocations List.
What is the pre-grant process?
- By December 1, 2008, each CDBG grantee allocated NSP funding must submit an application
to HUD (in the form of an amendment to their CDBG Annual Action Plan).
- HUD will conduct an expedited review for completeness and consistency with NSP
requirements and will give applicants 45 days from the date of first disapproval (but no later
than February 13, 2009) to revise/resubmit disapproved plans.
- Every state