FHFA Expands Its Neighborhood Stabilization Initiative to More Areas
Last week, the Federal Housing Finance Agency (FHFA) announced an expansion of the Neighborhood Stabilization Initiative (NSI). According to FHFA, NSI provides a sales platform to present real estate-owned (REO) properties to nonprofit community groups for purchase before the property is made available on the open market.
This initiative was introduced in Detroit in July 2014, expanded to Cook County, IL, in April, and last week reached an additional 18 metropolitan statistical areas that continue to struggle with their recovery from the housing crisis.
The additional neighborhoods are in Florida, Ohio, New Jersey, New York, Michigan, Missouri, Georgia, and Illinois. Fannie Mae and Freddie Mac each have at least 100 REO properties valued at less than $75,000 in every one of these markets. An interactive map, available on FHFA.gov, provides more detail.
“The NSI program is designed to give community-based buyers opportunities to acquire properties before they go on the market,” Carol Laslo, manager of Fannie Mae’s Public Entity REO Sales, tells Housing Industry Forum. After acquiring properties, community-based buyers rehabilitate and resell the properties to owner-occupants or rent them, she adds.
“The theory of neighborhood stabilization and revitalization is to get capital working again in markets where you have vacant properties and where you have people unable to get mortgages because there’s such a gap in valuations,” Rob Grossinger, president of the National Community Stabilization Trust, tells Housing Industry Forum.
“The NSI strategy to sell real-estate-owned properties is important when it dovetails with the strategy of a nonprofit organization that is trying to improve its neighborhood. They’re trying to take assets that are vacant and turn them into occupied and affordable housing,” says Grossinger.
Source: “Bringing Stability to Hard-Hit Neighborhoods,” by Don Geiger, published on Housing Industry Forum, Nov. 17.