The Department of Housing and Urban Development has changed the definitions of the terms "foreclosed" and "abandoned" to increase the reach of its Neighborhood Stabilization Program, which helps local communities acquire, reclaim and re-sell distressed properties more quickly and prevent further decline in neighborhoods decimated by such properties.
HUD now defines foreclosed to include properties in which their owners are in default on their mortgages and 90 days or more delinquent on their property taxes, and abandoned to include properties that are uninhabitable with lingering building code violations which their owners have failed to correct.
The expanded definitions, which became effective as of April 2, will increase the reach of NSP by allowing more properties to qualify and remove existing barriers caused by market conditions, HUD said. The changes also will help state and local grantees meet a Congressional requirement that they obligate all of their NSP1 funding by September.
"The rules needed to be more flexible so our local partners can put taxpayer dollars to work quickly to stabilize neighborhoods hard-hit by foreclosure," said HUD Sec. Shaun Donovan.
HUD had previously defined foreclosed to apply only to those properties that have been through the foreclosure process and abandoned as those homes which have been foreclosed on and been vacant for at least 90 days.
