What is the National Community Stabilization Trust?

The Stabilization Trust is an unprecedented collaboration of five leading community development nonprofit organizations - Enterprise Community Partners, the Housing Partnership Network, the Local Initiatives Support Corporation (LISC), National Council of La Raza, National Urban League, and NeighborWorks America.

The goal of the Stabilization Trust is to link financial institutions with local housing providers to help stem the decline of communities with high concentrations of vacant and foreclosed properties. The Stabilization Trust facilitates the transfer of foreclosed and abandoned property from financial institutions to states and localities to promote productive property reuse and neighborhood stability.

What services does the National Community Stabilization Trust provide to state and local programs seeking to stabilize distressed communities?

The Stabilization Trust offers state and local governments and local housing providers, and financial institutions struggling under the weight of a growing REO inventory a way to work together on a sustainable plan to regain a foothold in distressed neighborhoods across the nation. Focusing efforts in markets with weakening values, the Stabilization Trust provides two types of services to assist housing providers with the acquisition and reuse of foreclosed and abandoned property:

  1. Assistance with Acquiring Properties. The Stabilization Trust helps state and local programs (the "buyers") to acquire foreclosed and abandoned properties from financial institutions (the "sellers") in the following ways:
    • Saving Time and Effort - By acting as a single point of contact with the leading financial institutions holding and managing these properties, the Stabilization Trust saves buyers considerable time and effort.
    • Simplifying the Process - The Stabilization Trust provides a standardized process for identifying, inspecting and evaluating property offers from sellers.
    • Offering Exclusive Access and Pricing - The Stabilization Trust allows buyers an opportunity to acquire a property before it goes to market, resulting in better property conditions and lower acquisition and development costs.
  2. Providing Financing. The Stabilization Trust also supports local financing needs for the purchase and rehabilitation of foreclosed and abandoned property. The Stabilization Trust will provide financing for short- and intermediate-term needs by establishing a revolving line of credit supported by philanthropic and government capital.

    Stabilization Trust financing provides important advantages for participating jurisdictions:
    • Leveraging More Capital - By offering affordable revolving lines of credit, the Stabilization Trust increases the impact of NSP funding and the scale of neighborhood stabilization activities.
    • Providing Flexible Financing - The Stabilization Trust financing can help generate fast cash acquisition transactions for REO properties, facilitate acquisition and renovation, and increase homeownership and rental project bridge financing.

What services does the Stabilization Trust provide assistance to financial institutions seeking to help stabilize distressed communities?

For financial Institutions the Stabilization Trust assists in transferring foreclosed property in a seamless, cost-effective manner, and helps identify responsible approaches to providing mortgage capital for new mortgage-ready buyers and investors.

Who are participating sellers?

Many of the leading financial institutions in America are participating with the Stabilization Trust, supporting the transfer of foreclosed and abandoned properties. Additional financial institutions are being added continually.

Who are eligible buyers?

An eligible buyer is an entity representing a state or local grantee using HUD Neighborhood Stabilization Program funds that has the authority to make vacant and foreclosed property purchases on behalf of that initiative. The eligible buyer could be a local government, state government, nonprofit or for-profit entity.

What criteria should qualified buyers meet?

The Stabilization Trust simplifies the property transfer process to ensure HUD NSP guidelines for discounts and valuation are met and to expand the impact of government dollars.

The Stabilization Trust wants to ensure the success of these important programs. Buyers participating in the Stabilization Trust should demonstrate capability in five different areas:

  1. Collaboration. The local community stabilization effort involves an established partnership with government agencies, nonprofit organizations and other local stakeholders that defines the roles and accountability of each participant.
  2. Concentration. The local community stabilization effort should focus on one or more defined geographic areas to increase the likelihood that a significant, visible impact can be achieved.
  3. Comprehensive. Bricks and mortar activities such as the acquisition and rehabilitation of properties purchased through the Stabilization Trust should be complemented by a broader strategy that leverages related social investments and improvements to infrastructure, incorporates a marketing campaign, and otherwise integrates tangible and intangible community efforts.
  4. Capacity. The local community stabilization effort should include organizations with the ability to assess, acquire, manage, rehab and convey properties at scale.
  5. Capital. The program should have sufficient resources from the HUD NSP funds and other public and private resources to conduct a successful stabilization program.

For more information on community stabilization strategies, visit:

How do the Stabilization Trust property acquisition programs work?

The Stabilization Trust offers two main types of acquisition programs that are designed to help buyers acquire significant numbers of foreclosed and vacant properties from sellers:

  1. "First Look" Program. The First Look program gives buyers the opportunity to inspect and acquire foreclosed and vacant properties before they are listed for sale through traditional means. The First Look program results in an adjusted purchase price that reflects savings passed on to the buyers from avoided expenses associated with prolonged holding periods.
  2. Targeted Bulk Purchase Program. The Targeted Bulk Purchase program gives buyers the opportunity to purchase portfolios of distressed property in bulk, usually up to dozens of properties in a single transaction. These properties comprise aged inventory from the sellers, and offered at pricing similar to the First Look program.

How does the Stabilization Trust meet Neighborhood Stabilization Program discount guidelines?

The pricing of properties is an important issue for buyers as they seek the best price possible from financial institutions, while adhering to HUD Neighborhood Stabilization Program (NSP) guidelines. Through its programs, the Stabilization Trust has established a method to reconcile the fiduciary responsibilities of the financial institutions with the discount required by HUD, in a way that provides savings to all parties involved. The Stabilization Trust's pricing methods incorporate the costs to the financial institution of holding property, the conditions of the local real estate market, and other factors.

How will closings be executed?

The Stabilization Trust will not acquire property titles. Instead, the Stabilization Trust will facilitate the transfer of properties by providing standardized documentation and procedures.

How many entities can participate from a jurisdiction?

The Stabilization Trust requires that a single entity serves as the lead contact for each state or locality for interactions with the Stabilization Trust. In most locations we expect this to be an umbrella entity that represents local government and a coalition of nonprofits and other housing providers. A state, large city or multi-county program might have more than one entity, however the geographic boundaries of the areas where the different entities operate typically should not overlap.

If a buyer is participating with the Stabilization Trust, does this limit their ability to acquire properties from other sources?

No. Participation with the Stabilization Trust does not prevent a buyer from purchasing properties from brokers, directly from financial institutions, or from other sources.

How many properties must a buyer purchase to participate with the Stabilization Trust?

The objective of the Stabilization Trust is to assist the local programs in comprehensively addressing the factors contributing to market distress. Although a minimum number of expected property acquisitions has not been established for participation, local programs are encouraged to acquire sufficient properties annually which will generally achieve the largest benefit.

How do I get started?

The grantee or an authorized participant in a local community stabilization program is encouraged to contact the Stabilization Trust using our online form.