The purpose of the Neighborhood Stabilization Program (NSP) funds was to address the negative ramifications of the housing crisis that occurred over the past five years due to subprime mortgage lending. Nationally, subprime mortgage lending resulted in significant number of homeowners entering into foreclosure, with entire neighborhoods becoming vacant and abandoned. Pennsylvania, while experiencing subprime mortgage lending rates that were above the national average, has not shown the same amount of housing foreclosures. Likewise, the City of Allentown has not exhibited the same level of housing foreclosures as those seen in some areas, such as Las Vegas and several municipalities in California, Florida and Arizona. The City attributes some of this difference to its long term support of homeownership counseling programs which are provided to low/moderate income households, down payment and closing cost assistance for low/moderate income households and first time homebuyer programs run by several non-profit housing developers.   This variety of programs all warn about, discourage and do not allow the use of financing provided by predatory lenders.

 

The City of Allentown used NSP funds for the purposes intended; to promote neighborhood stabilization where subprime lending, foreclosure and housing vacancies have negatively affected the housing market.