Both Project Rebuild and the Neighborhood Stabilization Program are designed to assist with vacant and abandoned home rehabbing and foreclosure cleanup. There are noticeable differences between the two programs, however. See the nuts and bolts of both initiatives and their impact on foreclosures.
Project Rebuild Program
President Obama's Project Rebuild program, a White House initiative, is part of an overall job creation bill that is designed to spur job growth in the construction industry. It will also add a plethora of vendor contracts in the foreclosure clean-up industry.
The construction industry has lagged behind many industries because of a deflated housing market. There has been less of a need for construction building due to the real estate market crisis. With an abundance of foreclosures pouring into the market each day, there has been less of a need for new home building, and the construction industry has suffered tremendously.
But under Project Rebuild, which is still pending congressional approval, a staggering $15 billion is slated for the rehabbing and foreclosure clean-up of vacant and abandoned properties.
This initiative, which is estimated to create nearly 200,000 jobs, has many similarities to the administration's Neighborhood Stabilization Program (NSP). NSP doled out grants to non-profits to assist with community foreclosure cleanup and revitalization. The funds were slated to benefit the hardest-hit areas impacted by a market littered with foreclosures.
Differences between Project Rebuild and NSP
There are noticeable differences between Project Rebuild and the Neighborhood Stabilization Program, which was actually successful in stabilizing property values in two-thirds of the communities it targeted.
Residential and Commercial Properties
The first difference between Project Rebuild and NSP can be seen in residential versus commercial properties. Project Rebuild covers both residential and commercial properties; where NSP targeted residential properties. Housing Secretary Shaun Donovan stated the current initiative is designed to not only push along job growth, but to benefit the real estate market as a whole by "attacking the overhang of properties." Both commercial and residential blights will be corrected under the new program.
Program Targets Both "For-profit" Companies and "Non-profit" Organizations
Another primary difference in the Neighborhood Stabilization Program versus Project Rebuild is the targeting of funding recipients. Under NSP, grant recipients were non-profit organizations. But under the current program, funding recipients can be both non-profit and for-profit entities.
Win-win for Property Owners, Communities and Industry
The passing of Project Rebuild by Congress will create winning scenarios for buyers, sellers, communities as a whole, as well as the foreclosure cleanup and construction industries. The cleaning up and rehabbing of foreclosures in a neighborhood can have an immediate property-value effect on an address. Statistics show that a home sitting next to a vacant or abandoned foreclosure will drag its value down by an average $10,000.
Project Rebuild will help lift property values, provide jobs in the construction industry and add a slew of additional funding sources and small business contracts for those foreclosure clean-up companies who cleanup and trashout foreclosures.