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City of Philadelphia Submits Neighborhood Stabilization Program Plan to HUD

The City of Philadelphia’s Office of Housing and Community Development (OHCD) has submitted the City’s application to the U.S. Department of Housing and Urban Development (HUD) for funds through the Neighborhood Stabilization Program (NSP).

NSP is funded through the Housing and Community Development Act of 2008 and will provide approximately $16.8 million to the City to address the effects of abandoned and foreclosed properties.  The City plans to use its NSP funding to acquire and rehabilitate foreclosed properties and make them available as new affordable housing (both for-sale and rental).  The majority of funds will be targeted to 20 zip codes.

The City’s plan can be downloaded from the OHCD web site at:

Summary of Philadelphia Proposed Neighborhood Stabilization Plan


The City proposes to use its NSP funding to acquire, rehabilitate and reuse as affordable housing, properties which have been foreclosed upon.  The City’s Redevelopment Authority will purchase, at a discount, properties from FHA or bank REOs or other foreclosed properties and make the properties available to redevelopers (either non-profit or for-profit) to rehabilitate.  The redeveloper will sell the properties to homebuyers or hold the properties as rental housing.

Based on an average acquisition price of $50,000 per property and an average rehab cost of $34,000 per unit, the City expects to rehab about 185 homes through the initial use of NSP funds.  Since it is expected that some of these funds will revolve as homes are sold, additional homes would also be able to be rehabbed in the future.

The City does not intend to demolish any housing or relocate any families using NSP funds.

Geographic Targeting

As required by statute, the City will target funds to the areas of greatest need, including those with the greatest percentage of home foreclosures, the highest percentage of homes financed by a sub-prime loan and those identified as likely to face a significant rise in the rate of home foreclosures. In order to make targeting decisions, several sources of data have been examined.

To address the geographic distribution of NSP funds, the City is organizing areas by zip code and targeting properties for acquisition, rehabilitation and resale through NSP. Bank REO (Real Estate Owned) properties, properties listed by brokers and by the Federal Housing Administration (FHA) are also more easily identified by Zip Code than by census tract. The City proposes to target acquisition, rehabilitation and reuse based on the data and organized by zip code.

- Twelve zip codes (19124, 19131, 19134, 19135, 19138, 19140, 19141, 19142, 19143, 19145, 19149 and 19151) had more than 250 pre-foreclosure actions filed in 2007 and 2008.  These zip codes represented 55 percent of all pre-foreclosure filings.

- Eight other zip codes (19111, 19120, 19132, 19136, 19144, 19146, 19148, 19150), had between 150 and 249 filings. These represented 23 percent of pre-foreclosures.

Combined these 20 zip codes represent 78 percent of all pre-foreclosure actions from 2007 and 2008 to date.  In addition to properties for sale by bank REOs, FHA maintains an inventory of foreclosed properties in the City’s proposed zip codes for sale that will provide an additional source of properties to be acquired by the City for NSP.  Thus, the City proposes to target approximately 78 percent of all NSP funds to purchase, rehabilitate and reuse as housing eligible properties in these 20 zip codes.  The remaining 22 percent of funds will be available citywide, with special attention given to areas adjacent to the targeted zip codes such as 19139 and 19126.

(Please note that the OCC web site has a listing of loan servicers and related links to REO web sites:

Other Requirements

Income Targeting:  As required by law, the City plans to use NSP funds to benefit households earning below 120% AMI, with 25% of the funds targeted to households earning 50% or below of AMI.   It is anticipated that most of the funds targeted to households earning 50% or below of AMI will be used for affordable rental housing, although some may be used for lower-income homeownership.

Continued Affordability:  The City plans to use the HOME Program’s standards, the minimum acceptable for homes receiving NSP funding, which provide for continued affordability of up to 15 years depending on level of subsidy through the recording of liens or covenants.

Rehab Standards:  Homes rehabbed using NSP funds must meet the City’s building and property maintenance code for existing buildings (versus new construction).