WASHINGTON, DC - In an effort to prevent vacant properties from attracting blight and bringing down neighborhood housing values, U.S. Senator Jack Reed (D-RI) today announced that Rhode Island will receive $19.6 million to acquire and redevelop foreclosed properties.

According to HousingWorks RI 2008 Fact Book, nearly 2,500 Rhode Island homes were noticed for foreclosure from January 2008 to July 2008. Rhode Island Housing notes that the total number of foreclosure initiations from July 2007 to August 2008 represents a 193% increase over the number of initiations in the previous twelve-month period.

"Vacant, foreclosed homes can invite crime and drag down neighboring property values. This federal aid will help protect homeowners and neighborhoods by allowing local communities to purchase and rehabilitate foreclosed homes and abandoned properties across the state. This is a smart investment in strengthening our communities, putting more people to work in construction jobs, and bolstering the local economy," said Reed, a senior member of the Senate Banking Committee, who helped craft the housing legislation that allocated funding for this award.

This one-time stabilization grant can be used by state and local governments to purchase foreclosed homes, land, and property; demolish or rehabilitate abandoned properties or offer downpayment and closing cost assistance to low-to-moderate income homebuyers (those earning less than 120% of their area's median income); and create land banks to assemble, temporarily manage, and dispose of vacant land to encourage reuse or redevelopment of property.

Federal funding is provided through the Housing and Urban Development's (HUD) Neighborhood Stabilization Program (NSP) under the Housing and Economic Recovery Act of 2008, which provides $3.92 billion for the program.

The Housing and Economic Recovery Act of 2008, containing several key provisions authored by Senator Reed, was enacted in July. The bill clamped down on Fannie Mae and Freddie Mac; modernized and updated the Federal Housing Administration (FHA); created a program so struggling homeowners at risk of foreclosure could to refinance into 30-year, fixed-rate conventional mortgages; and required tougher licensing standards for mortgage brokers.