Neighborhood Stabilization

Like many communities throughout Michigan and the nation, Southfield is dealing with a record number of foreclosures and double digit property value losses throughout the city. To help stem the tide, the City applied for a Neighborhood Stabilization Program (NSP) grant through the U.S. Department of Housing and Urban Development (HUD).

On October 2, 2008 HUD awarded the City of Southfield a NSP grant in the amount of $3,241,457.03 pursuant to Housing Economic Relief Act (HERA) of 2008. The NSP grant is actually an amendment to the City’s Community Development Block Grant Program. The NSP provides emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. It allows the City to purchase foreclosed or abandoned homes to rehabilitate, resell, or redevelop them in order to stabilize neighborhoods and stem the decline of house values of neighboring homes. The NSP also provides financial assistance to qualifying families for acquisition of foreclosed and vacant properties.

On August 3, 2009 the City Council approved a resolution authorizing the incorporation of the Southfield Growth Corporation for the purpose of administering the NSP grant as submitted and approved by HUD. The City plans to utilize these funds to finance five approved activities designed to strengthen our city, neighborhoods and property values.

As of March 31, 2010, the City of Southfield Neighborhood Stabilization program has spent 83 percent of its allocated funding. Please note that we have limited funding for certain activities. These activities include assistance to households who are less than 50 percent of the area median income. All applicants are encouraged to complete an application. We anticipate additional revenues upon the sale of properties to existing clients. As funds are limited, the program will continue to serve clients who meet program criteria and can obtain the required mortgage financing.

Activity #1: Acquisition, Rehabilitation & Construction of Rental and/or Lease to Own Units

  • $810,400 has been allocated to acquire, rehab, and construct rental units that may be lease to own.
  • This funding amount equals 25 percent of the total allocation and will be leased to families who are at or below 50 percent of the area median income.
  • At least eight units will be developed; and the program income resulting from the rental and possible sale of the properties will be used to acquire and rehabilitate additional units.

Activity #2: Acquisition, Rehabilitation and Resale of Foreclosed Properties

  • $1.6 million has been allocated to acquire, rehab and sell foreclosed properties in the neighborhood target areas or other identified areas of need City-wide. The sale of these properties will be to families and individuals with incomes at or less than 120 percent of area median income.
  • It is estimated that approximately 20 housing units can be rehabilitated and sold to owner-occupants with the initial round of funding.
  • The clients will also receive direct homeownership assistance to cover down payment cost (beyond the required homeowner 3.5 percent amount), escrows, and closing cost.
  • Program income resulting from the sale of these properties will also be used to acquire and rehabilitate additional units.
  • During 2009, five homes were purchased and rehabilitation has begun; three homes will close soon. The total obligated funds for this activity in 2009 was $546,066.

Activity #3: Administration

  • The City was allocated $324,145, or 10 percent of the total grant award, for the administration of the activities associated with the NSP.

Activity #4: Clearance and Demolition Open Space Preservation

  • $150,000 has been allocated for the demolition of vacant residential structures throughout the City.
  • Units that are selected for demolition must meet the definition of blighted and require more investment to save than the property will be worth.
  • Units which are foreclosed, vacant structures and/or adjacent to public park lands or located in a floodplain may also be acquired.
    • This will provide public recreational benefit to income eligible neighborhoods.
    • During 2009, the City acquired two blighted properties adjacent to publicly owned properties.
    • Both of the properties are currently slated for demolition.
    • The total obligated funds for this activity in 2009 was $45,482.

    Activity #5: Direct Homeownership Assistance

    • The City allocated $356,911 to provide assistance for down payment, escrow, closing costs and other home improvements.
    • The assistance may come in the form of a grant, deferred loan, or reduced interest rate. It is anticipated that at least 20 families will be assisted.
    • During 2009, the NSP program assisted 11 families by providing direct homeownership assistance.
    • The total obligated for this activity in 2009 was $112,925.


    Qualifications for this program are based on H.U.D. (Housing & Urban Development) income (low, low to moderate, moderate to medium) guidelines. Regardless of the support provided by this program, each perspective buyer must bring three and one half (3½) percent of the purchase price to the property closing. They are also required to attend an eight (8) hour H.U.D. certified class regarding home ownership (budget, property maintenance, mortgage financing, mortgage product types, etc.) and secure their own mortgage financing. In addition, our Neighborhood Stabilization Program encourages being involved in your new community.


    Questions regarding the program may be directed to the City of Southfield Neighborhood Stabilization Program at (248) 796-5124 or (248) 796-5126 or e-mail