Neighborhood Stabilization Program

Helping Families. Supporting Communities. Empowering Individuals.

The HUD Neighborhood Stabilization Program is intended to provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. The Neighborhood Stabilization Program (NSP) provides grants to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of house values of neighboring homes. The program is authorized under Title III of the Housing and Economic Recovery Act of 2008 (HERA) (pdf).

Grant funds under NSP will be allocated to state and designated local governments to carry out specific eligible activities aimed at stabilizing distressed neighborhoods. Grantees have 18 months to obligate all funds for Eligible Activities. Applicants must then complete all activities within 4 years.

  • All activities funded by NSP must benefit low and moderate income persons whose income does not exceed 120% of the area median income.
  • At least 25% of the funds appropriated for the redevelopment of abandoned or foreclosed homes or residential property that will be used to house individuals or families whose income does not exceed 50% of the area median income. However, the State has set an additional goal to target up to 40% of the funds to benefit households whose income does not exceed 50% of the area median income.
  • NSP funds cannot be used to prevent foreclosures.

Agency Designation

The Governor's Office has designated the Illinois Housing Development Authority (IHDA) as the Lead Administering Agency for the State. Any inquiries regarding the IHDPA Neighborhood Stabilization Program should be referred to IHDA.