Governor Rell: State Seeks $45M in Stimulus Funds

To Help Communities Recover from Foreclosures

Program Would Offer More Opportunity, Assistance

For Homebuyers, Greater Protection for Lenders

Governor M. Jodi Rell today announced that a state-led consortium of public and private housing groups has applied for $45 million in federal stimulus funds to purchase and rehabilitate hundreds of foreclosed homes and provide mortgage assistance as part of a statewide effort to boost home ownership for low- and middle-income families and help towns and cities revitalize neighborhoods affected by the foreclosure crisis.

“These funds would allow us to continue our statewide efforts to bring neighborhoods back to life and help families achieve or hold onto the American dream of home ownership and economic stability,” Governor Rell said. “This comprehensive initiative will provide greater opportunity prospective homeowners and more protection for lenders.”

The Governor said the consortium intends to buy and rehabilitate as many as 450 homes with the bulk of the $45 million if the project is awarded the federal funds. At least 135 rehabilitated properties would be available to families earning at or below 50 percent of the area median income. The balance of the $45 million would be used for low-interest loans, mortgage counseling and other assistance for homebuyers.

 Under the American Recovery and Reinvestment Act of 2009 (ARRA), states, municipalities, nonprofits and consortiums can compete for up to $1.93 billion in Neighborhood Stabilization Program (NSP) grants. The Governor said the state has already received $25 million from the first round of NSP stimulus formula grants, which were “immensely beneficial, but admittedly did not go far enough.”

The Connecticut Consortium is headed by the Connecticut Department of Economic and Community Development (DECD) with four municipal and three nonprofit partners. The cities of Bridgeport, Hartford, New Haven, and Stamford, which are four of the most severely affected areas by foreclosures, are members along with the Corporation for Independent Living, the Greater New Haven Community Loan Fund, and Neighborhood Housing Services of Connecticut Inc. A steering committee is made up of stakeholder representatives, other municipal leaders, the Connecticut Housing Coalition and the Partnership for Strong Communities.

“Our private and non-profit partners bring dedication and expertise to this comprehensive initiative and share our vision to restore value and vibrancy to those areas in the state hit hardest by foreclosures,” Governor Rell said.

Highlights of the proposed neighborhood stabilization include:

·        $14.7 million would be used for acquisition and rehabilitation

·        $14.7 million would be used for financing

·        $1.9 million would be used for down payment assistance for homebuyers who meet eligibility requirements of the Connecticut Housing Finance Authority (CHFA). The CHFA would also provide mortgage counseling $6.75 million would go toward a CHFA-administered loan loss reserve to protect lenders in case of defaults. 

·        $4.5 million would be used to redevelop demolished or vacant properties

·        $4.2 million would be used for administration

·        Consortium would dedicate $1.5 million to housing counseling, education and job training through the Workplace Inc. and their Mortgage Crisis Job Training Program.

The Neighborhood Stabilization Program competitive grants are through the U.S. Department of Housing and Urban Development. Grants are used to buy foreclosed homes and then rehabilitate, resell or redevelop those homes and ensure surrounding homes maintain their values. 

For more information on the state’s NSP application and for all ARRA activity in Connecticut visit the state’s stimulus Web site at www.ct.gov and click on the CT Recovery link.