A look at the Neighborhood Stabilization Program

A look at the program

The Neighborhood Stabilization Program is part of the Housing and Economic Recovery Act approved last August.

The U.S. Department of Housing and Urban Development was given $4 billion to award to areas with the highest foreclosure rates. City and state governments applied with plans for spending the money. HUD awarded funds to the Arizona Housing Department, Maricopa and Pima counties and Avondale, Chandler, Glendale, Mesa, Phoenix, Surprise and Tucson.

Most of Arizona's Neighborhood Stabilization funds are aimed at buyers who earn close to their respective city's median income. In most cases, buyers must earn $30,000 to $80,000 a year to qualify. The more people there are in a household, the higher the qualifying income level rises.

Phoenix's plan focused on a couple of dozen of the city's 79 ZIP codes, areas with the highest rates of foreclosure. Mesa was awarded $9.1 million and focused on ZIP code 85024. Chandler is buying 17 vacant foreclosure homes scattered across the city with plans to resell them to buyers.

Participating cities and the state Housing Department have assembled teams and designed a process to distribute the money. Under federal guidelines, buyers must pass a class on budgeting and the obligations of homeownership.

With those elements now in place, it's time to spend.

Fred Karnas, former director of the Arizona Housing Department who oversaw the state's plans for Neighborhood Stabilization funding, said, "It's a complicated program that has never been done."

"But HUD wants the money spent quickly to help people now, so we are on a fast-track schedule," added Karnas, who in February became a senior adviser to HUD in Washington.