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Background:

The Neighborhood Stabilization Initiative (the “NSI”) is designed to stabilize neighborhoods hardest hit by the housing downturn.  It was jointly developed by the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac and includes strategies for disposing of the inventory of real estate owned (REO) properties held by Fannie Mae and Freddie Mac. While the number of REO properties owned by Fannie Mae and Freddie Mac was declining and approaching pre-crisis levels in some states, in some areas of the country REO inventory continued to increase or remained near historic highs.  Some particular markets had large concentrations of distressed and low-value REO properties as well as large volumes of loans that had been delinquent for one to two years that were likely to become REO. 

Given the unique challenges presented by these markets—high vacancy rates, weak for-sale markets, steep home-price declines—Fannie Mae and Freddie Mac partnered with the National Community Stabilization Trust (NCST), a national non-profit organization experienced in stabilization efforts for distressed communities to develop the NSI.  Working together, they leverage their ties to “boots on the ground” community organizations and local non-profits, and work closely with local governments to make timely and informed decisions about the best treatment of individual properties. 

The NSI was initiated as a pilot in the city of Detroit, Michigan in May 2014, and was then expanded to Cook County, Illinois in April 2015.  Building on the lessons learned from the pilot, NSI was developed into a program and was further expanded in December 2015 to 18 different metropolitan statistical areas with high volumes of low-value REO inventory.

NSI EXPANSION

COOK COUNTY, IL

DETROIT, MI

 





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