Background:
On July 26, 2008 Congress passed bill H.R. 3221 commonly referred as the Housing and Economic Recovery Act of 2008. Under this section, $3.92 billion is set aside to provide emergency assistance for the redevelopment of abandoned and foreclosed homes. Congress also indicated in the bill that the U.S. Department of Housing and Urban Development (HUD) would establish the formula allocation and fund "States and units of general local government with the greatest need, as such need is determined in the discretion of the Secretary". On September 26, HUD released their Methodology for Allocation of $3.92 billion along with the list of states and local governments who will receive the allocation and their amounts. Louisiana’s state allocation amount is $34,183,994 million dollars while local government allocation for Baton Rouge is $2,308,848 million and New Orleans is $2,302,208.

On September 29, the Federal Register published and released HUD’s notice to implement its newly created program, Neighborhood Stabilization Program (NSP). NSP will be regulated under HUD’s existing Community and Development Planning through Community Development Block Grant (CDBG). LHFA will develop the Action Plan through OCD, who will serve as the lead and responsible entity. OCD will monitor LHFA as it implements the NSP Action Plan.

HUD has established the following eligible funding uses under NPS Properties:

Establish financing mechanism for purchase and redevelopment of foreclosed upon homes and residential properties, including soft-seconds, loan loss reserves, and shared-equity loans for low, moderate and middle income homebuyers;
Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties; Establish land banks for homes that have been foreclosed upon;
Demolish blighted structures and;
Redevelop demolished or vacant properties.