Durbin: $98 Million in Recovery Act Funding Will Be Used to Put Chicagoans Back to Work and Mitigate Foreclosure Crisis

CHICAGO, IL - January 26, 2010 - (RealEstateRama) — U.S. Senator Dick Durbin (D-IL) today announced that the U.S. Department of Housing and Urban Development (HUD) has awarded the City of Chicago a Neighborhood Stabilization Program (NSP) grant in the amount of $98,008,384 through the American Recovery and Reinvestment Act. These grants are competitively awarded to local governments and non-profit housing developers to spur economic development and create jobs in hard-hit communities.

“One of the primary goals of the Recovery Act is to put people back to work. Today’s funding will help us reach that goal in some of Chicago’s most challenged neighborhoods,” said Durbin. “Before the foreclosure crisis hit, areas that had suffered from years of neglect were beginning to thrive thanks to community planning and public and private investment. To preserve this progress in the midst of the foreclosure crisis, we need to get behind the programs designed to stabilize neighborhoods, protect past investments, and foster affordability in the long-run.”

The funding is part of $1.93 billion awarded to grantees nation-wide, and will assist communities in both providing immediate relief and in laying a new foundation for long-term economic strength. Competition for these grants was fierce: HUD received 482 applications for over $15 billion in funding requests and awarded a total of only 56 grants. The City of Chicago asked for $98 million and received the full amount of its request.

The grant will be used to aid the purchase and rehabilitation of vacant, abandoned, and foreclosed-upon homes and residential properties with the goal of selling, renting, or redeveloping those properties, as well as to demolish vacant, blighted structures, and to redevelop those properties as housing.

 

“These grants have been awarded to applicants with the most innovative ideas to rebuild local communities, while also demonstrating that they have the capacity to be responsible stewards of taxpayer dollars,” said Durbin. “The City of Chicago will be able to use these funds to stabilize areas that have suffered from foreclosures and abandonment, and to combat the debilitating effect these problems create, including reduced property values and neighborhood decay. By providing chances to build affordable, energy-efficient housing and arranging for subsidies based on income levels and neighborhoods, these grants will help revitalize local economies and encourage job growth.”

The City of Chicago will invest these NSP funds in the following community areas: Albany Park, Chicago Lawn, Englewood, Grand Boulevard, Greater Grand Crossing, Hermosa, Humboldt Park, Logan Square, South Chicago, South Lawndale, Washington Park and Woodlawn.

In 2008, nearly 20,600 foreclosures were filed in Chicago and 9,947 were completed, often leading to vacant, boarded, or abandoned homes. More than 97% of the completed foreclosures reverted to the lender at foreclosure auction, indicating that many homes would likely remain vacant for some time. The magnitude of this problem had begun to reverse much of the progress that the City of Chicago and its private and non-profit partners had made over the last decades.

The following Illinois entities will also receive NSP grants totaling $160,151,641state-wide: the Center for Community Self-Help: $3,299,543; Chicanos Por La Causa, Inc.: $13,551,959; the City of Evanston: $18,150,000; the Community Builders, Inc.: $8,611,047; and the Rock Island Economic Growth Corporation: $18,530,708.

Tagged as: NSP, Recovery Act

 

 

 

 

USGBC - U.S. Green Building Council

HUD - U.S. Department of Housing and Urban Development

NAR - National Association of REALTOR

RealtyTrac

FHFA - Federal Housing Finance Agency

Freddie Mac

MBA - Mortgage Bankers Association