The Housing and Economic Recovery Act of 2008 established three very specific targeting responsibilities for state and local governments implementing the Neighborhood Stabilization Program.
(1) The statute specifies that "all of the funds appropriated or otherwise made available under this section shall be used with respect to individuals and families whose income does not exceed 120 percent of area median income";
(2) If further states that "not less than 25 percent of the funds appropriated or otherwise made available under this section shall be used for the purchase and redevelopment of abandoned or foreclosed homes or residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of area median income";
(3) Finally, it indicates that grantees should give priority emphasis in targeting the funds that they receive to "those metropolitan areas, metropolitan cities, urban areas, rural areas, low- and moderate-income areas, and other areas with the greatest need, including those--
(A) with the greatest percentage of home foreclosures;
(B) with the highest percentage of homes financed by a subprime Mortgage related loan; and
(C) identified by the State or unit of general local government as likely to face a significant rise in the rate of home foreclosures."
To assist local and state governments at meeting these requirements, HUD has posted what the FY 2008 50% and 120% HUD Area Income Limits are for each area. (https://www.huduser.gov/portal/publications/commdevl/Section8Limits_50_120.xls)
HUD has also created an Excel file for each state that shows every Census Block Group (part) and whether or not it qualifies as an area of low-, moderate, and middle-income (LMMH) benefit, where more than 51 percent of the people in the area had incomes in 2000 less than 120 percent of Area Median Income. For example, acquisition of a foreclosed and abandoned property in an area shown on this table as meeting the requirement for area benefit would satisfy the statutory requirement that the funds be used to serve persons less than 120 percent of HUD Area Median Income.
This table also provides data from four sources that are used to predict whether or not a neighborhood has a high or low risk for foreclosed and abandoned homes. The column "Estimated_foreclosure_abandonment_risk_score" provides a score for each neighborhood from 0 to 10, where 0 indicates that our data suggest a very low risk and 10 suggest a very high risk.
This score and the "predicted_18_month_underlying_problem_foreclosure_rate" do not provide the actual level of problem in each neighborhood, but rather indicate there is a risk for problems. If a state or local government is looking for a place to start in considering how to target their funds, they may want to look at the neighborhoods with high risk scores. States and local governments are encouraged to use other data, such as county records on foreclosure filings or tax foreclosures, that may also point to areas with the greatest problems.
The data used to calculate the risk scores are also included in the file. The data used here are from different levels of geography, as noted below. That is, the data on home price change is for the whole metropolitan area, not just for the neighborhood and unemployment is for the place or county, not just the neighborhood. The high-risk loan rate and address vacancy data are at the neighborhood (Census Tract) level:
- Office of Federal Housing Enterprise Oversight (OFHEO) data on decline in home values as of June 2008 compared to peak home value since 2000 at the Metropolitan/Micropolitan/Non-Metropolitan level ("OFHEO_CBSA_home_price_decline_since_peak").
- Federal Reserve Home Mortgage Disclosure Act (HMDA) data on percent of all loans made between 2004 and 2006 that are high cost at the Census Tract Level ("HMDA_hi_cost_loan_rate").
- Labor Department data on unemployment rates in places and counties as of June 2008 ("BLS_place_or_county_unempoloyment_rate_0608").
- USPS data on residential addresses identified as being vacant for 90 days or longer as of June 2008 at the Census Tract level ("USPS_residential_vacacancy_rate").
Grantees with GIS capability that wish to map these data can find the shape files for the geography at (https://www.huduser.gov/portal/datasets/geo/summarylevel.html), select "Summary Level 090".
Areas of Low- Moderate-, and Middle-Income Benefit with Abandonment/Foreclosure Risk Scores: