Senate Dems propose another $15 billion to fight foreclosures

"We are facing a challenging budget environment, but this is the right time to make smart investments in strengthening our communities, putting more construction workers back to work and bolstering the economy," Reed said. "This initiative will provide a flexible source of funding to help local communities leverage federal dollars to effectively address vacant and blighted properties."

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Since 2008, the government has been authorized to make a little more than $7 billion in grants to states to aid in the redevelopment of foreclosed property. These grants were made under the Neighborhood Stabilization Program (NSP), run out of HUD.

Within that program, $4 billion was authorized under a 2008 law, another $2 billion was added under the 2009 stimulus bill and $1 billion more was added under the 2010 Dodd-Frank law.

Reed's bill essentially expands the NSP by more than 200 percent — $10 billion of the new money would be distributed to states under a formula similar to the one used by NSP, and another $5 billion would be distributed through "competitive grants."

Reed said the bill could mean another $43 million for Rhode Island, nearly double the $26 million his state has received under NSP. Under the bill, each state would get a minimum of $20 million in foreclosure aid.

The bill would also expand the NSP program by allowing grants to be used for the redevelopment of commercial properties.

Reed's bill is sponsored by 10 other Democrats, including Majority Whip Dick Durbin (Ill.), Senate Judiciary Committee Chairman Patrick Leahy (Vt.) and Democratic Policy and Communications Center Chairman Charles Schumer (N.Y.). Other sponsors are Sens. Daniel Akaka (Hawaii), Richard Blumenthal (Conn.), Mark Begich (Alaska), Sherrod Brown (Ohio), Al Franken (Minn.), Jeff Merkley (Ore.) and Sheldon Whitehouse (R.I.).