Today marks the one-year anniversary of the expanded Neighborhood Stabilization Initiative (NSI) program, through which the National Community Stabilization Trust (NCST) provides organizations working to stabilize neighborhoods with access to REO properties from Fannie Mae and Fannie Mac. Because the program enables Fannie Mae and Freddie Mac to avoid some of the costs associated with holding and marketing REO properties, they can pass those savings on to the community buyers.
“The NSI program assists those communities in our nation whose housing markets continue to struggle,” said Rob Grossinger, president, NCST. “By providing this “first look” to organizations supporting neighborhoods, Fannie Mae and Freddie Mac strengthen local housing markets and provide new opportunities for homeownership and affordable rental.”
NCST piloted NSI with Fannie Mae and Freddie Mac in Detroit, Michigan, and Cook County, Illinois, demonstrating that by offering mission-based organizations a “first look” at properties in distressed markets, those organizations could more easily help put those properties back into productive use for members of the local community, rather than sell them to outside investors.
As a result of the pilot’s success, on December 1, 2015, Fannie Mae and Freddie Mac expanded NSI from the two pilot areas to a total of 18 strategic markets with large concentrations of distressed and low-value inventory.
During the past year alone, community buyers have purchased 1,372 NSI properties for approximately $92 million, enabling them to help stabilize neighborhoods by providing high-quality, affordable housing for homeownership and rental and by demolishing unsafe and unstable structures. Several hundred additional properties were purchased through the NSI pilots prior to the expansion.
“In these markets, acquisition plus renovation costs often exceed the post-renovation value,” added Julia Gordon, executive vice president, NCST. “By helping our local partners save on acquisition costs, NSI has enabled them to return distressed properties to the housing stock in rehabilitated condition and to help build wealth in communities that have been left behind by the housing recovery.”
Community buyers have offered praise for the NSI program.
“As we work to lift home values in metro Atlanta’s distressed neighborhoods, it is important that REO holdings be part of the solution. The NSI program is providing our organization with a great opportunity to boost our acquisition of single-family homes, accounting for more than 30 percent of our production in the last 12 months,” explained John O’Callaghan, president and CEO of Atlanta Neighborhood Development Partnership.
Last month, Fannie Mae and Freddie Mac made additional improvements that will make NSI more effective for low-value properties and for properties in higher-cost areas.
The 18 metropolitan areas included in the expanded NSI program are: 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.
NCST is a non-profit organization that aims to restore vacant and abandoned properties to productive use and protect neighborhoods from blight. For more information, visit us at www.StabilizationTrust.org.
For interviews please directly contact: Julia Gordon, NCST Executive Vice President, at 202-669-0424 or jgordon@stabilizationtrust.org
Other inquiries: Sally Powell Schall, NCST Director, Communications at 214-710-3411 or spowellschall@stabilizationtrust.org
SOURCE: National Community Stabilization Trust, Yahoo! Finance