WASHINGTON — Local governments are at risk of losing more than $1 billion in foreclosure relief funds they can’t spend quickly enough.
With use-it-or-lose-it spending deadlines weeks away, cities and counties are scrambling to shore up neighborhoods by buying foreclosed and abandoned properties — but are often stymied by market forces, federal regulations and a lack of staffing.
The $3.9 billion Neighborhood Stabilization Program (NSP), passed in 2008, was intended to help areas hardest hit by the housing crisis buy foreclosed homes and residential properties. In 2009, Congress added $2 billion via the stimulus bill. Last week, President Obama signed into law another $1 billion for a third round of spending, for a total of $6.9 billion.