On November 10, FHFA announced that it was expanding the Neighborhood Stabilization Initiative (NSI) to 18 additional metropolitan areas around the country. This NSI expansion is effective today, December 1. In these 18 new NSI areas, which are listed below, nonprofits and other community organizations now have the exclusive opportunity to buy foreclosed properties owned by Fannie Mae or Freddie Mac before those properties are listed for sale to the general public:
- Akron, OH;
- Atlanta-Sandy Springs-Roswell, GA;
- Baltimore-Columbia-Towson, MD;
- Chicago-Naperville-Elgin, IL;
- Cincinnati, OH-KY-IN;
- Cleveland-Elyria, OH;
- Columbus, OH;
- Dayton, OH;
- Detroit-Warren-Dearborn, MI;
- Jacksonville, FL;
- Miami-Fort Lauderdale-West Palm Beach, FL;
- New York-Newark-Jersey City, NY-NJ-PA;
- Orlando-Kissimmee-Sanford, FL;
- Philadelphia-Camden-Wilmington, PA-NJ-DE;
- Pittsburgh, PA;
- St. Louis, MO;
- Tampa-St. Petersburg-Clearwater, FL, and
- Toledo, OH
Foreclosed homes can sometimes remain vacant for months, or even years, which can have a negative impact on neighborhoods. The impact can be even worse when there are multiple foreclosed properties in a single community.
Some parts of the country have seen their housing market recover, but in other communities the number of foreclosed properties owned by financial institutions remains elevated. These markets present unique challenges such as steep home-price declines, high vacancy rates, and weak sales activity. To address this issue, FHFA worked with Fannie Mae and Freddie Mac to develop NSI to stabilize neighborhoods that continue to face challenges resulting from the housing downturn.
We started NSI as a pilot program last year in Detroit – one of the hardest hit cities in the country – and earlier this year expanded the pilot to Cook County, Illinois, covering Chicago and many of its suburbs. A central element of NSI is the partnership between Fannie Mae and Freddie Mac and the National Community Stabilization Trust (NCST), a national nonprofit organization that is experienced in helping to stabilize distressed communities. NCST has ties to "boots on the ground" community organizations and we know that partnerships with local community buyers are critical to the success of programs like NSI.
How will NSI work? In the markets where we've expanded NSI, foreclosed homes that have not yet been listed for public sale will be presented to NCST-approved community buyers that will have the exclusive opportunity to evaluate and purchase them. The primary goal is to sell the homes to local organizations that can fix them up and bring them to market for people to live in again, either as owners or renters. Homes will be offered to these community buyers at prices that reflect savings on things like marketing, upkeep, utilities and taxes – costs Fannie Mae and Freddie Mac would have paid through the normal process of disposing of foreclosed homes. Faster sales to organizations that have a vested interest in helping stabilize their communities will provide support to the neighborhoods that need it most.
We know that the recovery in the housing sector has not been balanced. Home prices have increased in some neighborhoods but not in others. I've personally visited some distressed communities and believe NSI is a great way to address challenging housing markets in neighborhoods across the country.
Local organizations experienced in community stabilization are encouraged to contact NCST at newbuyer@stabilizationtrust.com to inquire about becoming qualified as a community buyer. For more information on NSI, check out the links to our news release, fact sheet and interactive map.
Tagged: Foreclosure
By: Sandra Thompson
Deputy Director of FHFA's Division of Housing Mission and Goals