NSP Basics


picture of an NSP house

The Neighborhood Stabilization Program (NSP) was established for the purpose of providing emergency assistance to stabilize communities with high rates of abandoned and foreclosed homes, and to assist households whose annual incomes are up to 120 percent of the area median income (AMI).

The U.S. Congress appropriated three rounds of NSP funding. Congress has not allocated any additional funds to NSP since the third round of funding, and most grantees are in the process of completing activities and closing out their grants.


NSP1 provided $4.0 billion to 307 state and local governments on a formula basis. NSP1 was established by Section 2301(b) of the Housing and Economic Recovery Act of 2008 (Pub. L.110–289, approved July 30, 2008), also known as HERA. HERA created NSP and was the basis for subsequent NSP funding rounds.


NSP2 was authorized under the American Recovery and Reinvestment Act of 2009, (Pub. L. 111–5, approved February 17, 2009), also referred to as ARRA or “the Recovery Act.” $2.0 billion in NSP2 funds were made available on a competitive basis to 56 states, local governments, nonprofits, and consortia of nonprofit entities.

From the $2.0 billion in NSP2 funds, the Recovery Act also authorized HUD to establish NSP-TA, a $50 million allocation made available to national and local technical assistance providers to support NSP grantees.


NSP3 provided an additional $1 billion on a formula basis to 270 state and local governments. NSP3 was authorized by Section 1497 of the Wall Street Reform and Consumer Protection Act of 2010 (Pub. L. 111–203, approved July 21, 2010), also known as the “Dodd-Frank Act.”

View a list of NSP grantees and grantee expenditures to date.

Eligible Activities

picture of an NSP house

NSP funds were used for activities which included:

  • Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties
  • Purchase and rehabilitate homes and residential properties abandoned or foreclosed
  • Establish land banks for foreclosed homes
  • Demolish blighted structures
  • Redevelop demolished or vacant properties

In addition, NSP funds were required to meet one of the following CDBG national objectives:

  • Housing Activities: Providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income.
  • Area Benefit Activities: Benefiting all the residents of a primarily residential area in which at least 51% of the residents have incomes at or below 120% of area median income. (NSP1 only)
  • Limited Clientele Activities: Serving a limited clientele whose incomes are at or below 120% of area median income.

NSP Stories

To see some of the great work that has been done around the country using NSP funds, view the Recovery from Crisis: Stories and Strategies from NSP Video Series.

To view photos and videos of NSP projects, visit the NSP Multimedia page.

Family standing in front of a new home