House Votes to Terminate Key Foreclosure Response Program


Neighborhood Stabilization Program at Risk Despite Rising Homelessness

WASHINGTON, D.C. – March 17, 2011 – (RealEstateRama) — Yesterday, the House of Representatives voted to terminate the Neighborhood Stabilization Program (NSP), one of the Administration’s key foreclosure response programs. This vote came despite the devastating impacts the recession and foreclosure crisis continue to have on neighborhoods across the country — including increased homelessness.

Recent studies show a dramatic rise in homelessness — especially family homelessness — in the wake of the recession and the foreclosure crisis. In 2010 alone, family homelessness increased by an average of 9% in cities across the country, and more than 6 million people have been forced to live doubled up with family or friends out of economic necessity.

The termination of NSP is part of the new House’s efforts to curtail the federal deficit via massive budget cuts. The existing House budget proposal (H.R. 1) would reduce spending by $60 billion over last year’s budget. If this legislation passes, the National Alliance to End Homelessness has estimated that 161,000 people who would be housed with government assistance will become homeless instead.

The proposed cuts to housing and neighborhood stabilization programs come less than one year after the release of the first ever comprehensive Federal Strategic Plan to Prevent and End Homelessness.

Maria Foscarinis, executive director of the National Law Center on Homelessness & Poverty (NLCHP) said, The proposed cuts threaten to send more families over the edge into homelessness, at a time when homelessness has already reached levels not seen since the Great Depression. Funding for affordable housing should be increased — not cut.

Additionally, H.R. 1, as approved by the House, would cut $5.5 billion from HUD programs, including:

– $210 million (70%) for housing for people with disabilities
– $551 million (71%) for senior housing
– $1 billion (43%) for public housing capital needs
– $1 billion (46%) for Community Health Centers, which includes Health Care for the Homeless funding
– $70 million (17%) in Legal Services Corporation funding

Jeremy Rosen, policy director at NLCHP, added, Cutting funding to programs that keep people in their homes, while increasing funding to homelessness programs just doesn’t make sense. It would mean we’re allowing the problem to get worse — allowing more people to fall into homelessness — before we try to help. This is unacceptable.”

In contrast, the current Democratic budget proposal would provide $200 million new funding for HUD’s homeless assistance grant funding, which would permit HUD to implement the HEARTH Act and provide housing to more homeless persons. Other critical affordable housing and human services programs would receive level funding.

Foscarinis also said, Last week, the U.S. told the United Nations that addressing homelessness here at home is a human rights obligation. Cutting vital housing programs gives the lie to those obligations — and damages our credibility as a leader in the world community.

A number of other foreclosure response programs are on the chopping block amid the budget negotiations. Last week, the House voted to end the Federal Housing Administration’s short-refinance program and the Emergency Mortgage Relief Program, and the Home Affordable Modification Program (HAMP) will be considered for termination in the next two weeks.


The National Law Center on Homelessness and Poverty’s mission is to prevent and end homelessness by serving as the legal arm of the national movement. To achieve its goal, the Law Center pursues three main strategies: impact litigation, policy advocacy, and public education.

Whitney Gent
Phone: (202) 638-2535

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