Senator Charles E. Schumer

FOR IMMEDIATE RELEASE: September 26, 2008

SCHUMER ANNOUNCES OVER $2 MILLION IN NEW CDBG MONEY FOR ORANGE COUNTY MUNICIPALITIES TO BUY FORECLOSED AND VACANT HOMES, REVIVE COMMUNITIES COUNTY RAVAGED BY FORECLOSURES AND ECONOMIC SLOWDOWN

Funding is Part of a $54.5 Million Neighborhood Stabilization Program Which Will Help Orange County Communities Acquire and Redevelop Foreclosed Properties

Millions of Borrowers Facing Foreclosure As Economic Uncertainty looms

Foreclosed Properties Drag Down Home Values on Their Block and Across Entire Communities

As our national economy is in grave turmoil and families continue to lose their homes to foreclosure, U.S. Senator Charles E. Schumer announced over $102 million for housing stabilization. The Neighborhood Stabilization Program provides state and local governments with funding to respond to rising foreclosures and declining property values. New York State is receiving a total of $54,556,463, while Orange County has been allotted $2,163,744. Municipalities throughout New York can apply to receive a portion of those funds for specific projects. The funding is being distributed by the U.S. Department of Housing and Urban Development, and was designated for use by the Housing and Economic Recovery Act of 2008.

“The subprime mortgage crisis is shaking the foundation of the U.S. economy and we need to use every weapon in the arsenal to try and stop it,” Schumer said. “These funds go a long way in protecting families currently in danger of losing their homes, families who have already lost their homes, and the millions more who could be sucked in if we don’t act.”

The Neighborhood Stabilization Program (NSP) allows States and local governments to use the funding to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight. NSP grantees can use the stabilization grants to buy foreclosed homes, purchase land and property, demolish or rehabilitate abandoned properties, offer down payment and closing cost assistance to low to moderate income homebuyers, or to create “land banks” to assemble, temporarily manage, and dispose of vacant land to encourage re-use or redevelopment of property. Grantees are obligated to use the funds within 18 months of notification.

HUD will help the communities implement their neighborhood stabilization programs. They are also actively encouraging local governments to coordinate with each other and with their state governments. Implementing these programs may benefit from an area-wide or even regional approach. It may also require state and local planners to put their collective heads together to ramp up these programs.

For over a year, New York has been in the grips of the subprime mortgage crisis with foreclosure rates spike to unthinkable highs. The housing crisis continues to devastate countless many American families. As a result of declining home values, questionable lending practices and a deteriorating economy, millions of borrowers find themselves facing foreclosure and these funds are a strong step towards stabilizing the housing crisis.

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