Neighborhood Stabilization Program


After the severe nationwide housing crisis in 2008, the Congress created the Neighborhood Stabilization Program (NSP) to stabilize communities that suffered from foreclosures and abandonment.

The State received a total of $42 Million in two separate allocations for distribution to cities, counties, and nonprofit organizations in Jefferson County and Mobile County, and the cities of Bessemer, Birmingham, Huntsville, Mobile, and Montgomery.

NSP activities include the acquisition and redevelopment of foreclosed and abandoned single-family and multi-family residential properties.

ADECA administers NSP funding that is provided by the U.S. Department of Housing and Urban Development.

Two notable nonprofits with significant production are Habitat for Humanity and Aletheia House. Except for a small amount of program income, the full grant allocation has been expended and this program is expected to be closed out soon.

There have been three parts to the program on the federal level:

  • NSP1 – funding was authorized under the Housing and Economic Recovery Act of 2008.
  • NSP2 – funding was authorized under the American Recovery and Reinvestment Act of 2009.
  • NSP3 – funding was authorized under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

ADECA has received funding from NSP1 and NSP3, all of which has been allocated.



NSP Laws, Regulations, and Federal Register Notices

NSP Policy Alerts

NSP Toolkits


NSP3 – Overview

This overview information is courtesy of

NSP3 funds were allocated by a formula based on the number of foreclosures and vacancies in the 20 percent of U.S. neighborhoods (Census Tracts) with the highest rates of homes financed by a subprime mortgage, are delinquent, or are in foreclosure. The minimum grant amount was $1 million for non-state grantees and the basic allocation is adjusted to ensure that every state receives a minimum of $5 million. The net result is that these funds are highly targeted to communities with the most severe neighborhood problems associated with the foreclosure crisis.

Click here for NSP3 – Documents.


NSP1 – Overview

This overview information is courtesy of

NSP1 grantees were selected on the basis of statutory objectives and a greatest need formula developed by HUD. Each of the 50 states and Puerto Rico received a minimum award of $19.6 million. Insular areas and the District of Columbia were also stipulated to receive a direct award. The other grantees that received direct awards were selected on the basis greatest need factors (e.g. highest rate of foreclosures, subprime mortgages, abandoned homes, etc.) with a minimum grant threshold of approximately $2 million.

Click here for NSP1 – Documents.



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