Habitat for Humanity International reached a milestone in February, completing the second year of the Neighborhood Stabilization Program, a federally funded housing program authorized by Congress through the American Recovery and Reinvestment Act of 2009 and administered by the U.S. Department of Housing and Urban Development.

Habitat is one of 56 entities — state governments, local municipalities and nonprofits — awarded funds from the second round of the Neighborhood Stabilization Program, making it part of a three-year, nationwide effort to restore neighborhoods left in severe decline by the foreclosure crisis that began in 2007.

The $137.6 million awarded to Habitat is the second largest amount overall and the largest among nonprofits. With seven affiliates serving as developers, Habitat is using NSP2 funds to acquire, rehabilitate or build a minimum of 1,062 housing units in Dallas, Texas; Los Angeles, California; Milwaukee, Wisconsin; Brooklyn, New York; and Miami, Collier County (Naples) and Pensacola, Florida.

These affiliates have committed to developing anywhere from 100 to 250 homes in three years. In some cases, this undertaking has increased their normal capacity by 50 percent to 75 percent and has them venturing for the first time into acquiring and rehabilitating foreclosed properties.

“The rewards outweighed the challenges faced during the first two years,” says Jeff Pope, senior director of Habitat for Humanity International’s Neighborhood Revitalization Initiative, which encompasses the organization’s NSP2 efforts. “It’s taken our abilities to new levels, making us better equipped to continue fulfilling our mission long after NSP2 ends.”

Serving even more families
Habitat’s desire to participate in NSP2 isn’t about the numbers; it’s about the families.

“Along with everyone else, we watched as the foreclosure numbers kept rising, and we wanted to help,” said Donna Golden, Habitat for Humanity International’s director of government grants and lending resources.

When HUD announced the availability of NSP2 funds — and gave nonprofits the chance to compete for those funds — Habitat seized the opportunity.

The neighborhoods that Habitat affiliates are directing NSP2 funds toward all suffered from high rates of abandoned and foreclosed properties. They also represent a diverse range of regional housing issues that existed before the foreclosure crisis, and worsened after: the previously overheated markets and residual hurricane damage in Florida, the geographic and economic separation of low-income residents in South Dallas from those in North Dallas, the aging housing stock in Milwaukee’s post-industrial neighborhoods, and the inadequate supply and perpetually high cost of housing in Los Angeles and New York City.

Best of all, the 1,062 homes funded by NSP2 and private donors will serve even more families, as those mortgage payments return to the affiliates’ revolving funds for humanity.

Beyond partnering with more families, Golden says the other reason Habitat wanted to participate in NSP2 is because the Habitat model is one of the best solutions to the foreclosure crisis —an event in which predatory lending practices played a primary role, according to HUD’s January 2010 report to Congress. “Our housing model doesn’t set people up to fail,” Golden says.

Habitat is also one of the few organizations that can provide homeownership opportunities to individuals and families earning at or below 50 percent of the area median income and maintain a low mortgage delinquency rate. That’s crucial in NSP2, which requires that recipients use 25 percent of its awarded funds on homes for residents with that income level.

Collaborating within communities
Neighborhood Stabilization Program funds pay only 59 percent of the costs involved in developing these homes. The rest — about $56 million — must be raised by the affiliates through donations from private sources.

During the first two years, an estimated 553 businesses and nonprofits and 185 faith communities contributed thousands of volunteer hours and in-kind and financial donations, totaling $10.2 million of the required matching funds.

“We really stepped up our game with NSP2,” says Veronica Garcia of Habitat Greater Los Angeles. “It got us to look at (neighborhood) stabilization and realize that collaboration is needed if we want to eliminate poverty housing.”

NSP2 is truly a partnership involving all sectors of society. Because of that, Habitat is accomplishing the program’s goals: collaborations among local organizations, a reduction in foreclosed homes, a rise in new jobs and revitalized neighborhoods, increases in tax revenue, and a greater supply of affordable housing for low-income individuals and families.

The best news: By using funds responsibly and efficiently, Habitat expects to exceed by 100 the total number of NSP2-assisted homes, enabling even more families to own simple, decent, affordable homes.