About Indiana's Blight Elimination Program (INBEP)
WHAT IS THE INDIANA BLIGHT ELIMINATION PROGRAM?
Indiana’s Blight Elimination Program (INBEP) is designed to provide subsidies in the form of loans to allow applicants to acquire and demolish blighted residential structures. The goal of the INBEP is to stabilize property values and prevent foreclosures through the demolition, greening, and continuing maintenance of vacant and abandoned blighted residential properties throughout the state. To administer this program, the State of Indiana has been divided into six funding divisions based on county population size and percent of total state population.
As the nation was on the edge of falling into a second Great Depression, confidence in the financial system was waning, and elected officials and administrators of struggling states and municipalities faced budget constraints and increased threats to neighborhood stability. To address this issue, President Obama’s Administration established the Hardest Hit Fund (HHF).
Indiana’s Blight Elimination Program (INBEP) is designed to provide subsidies in the form of loans to allow applicants to acquire and demolish blighted residential structures. The goal of the INBEP is to stabilize property values and prevent foreclosures through the demolition, greening, and continuing maintenance of vacant and abandoned blighted residential properties throughout the state. To administer this program, the State of Indiana has been divided into six funding divisions based on county population size and percent of total state population.
As the nation was on the edge of falling into a second Great Depression, confidence in the financial system was waning, and elected officials and administrators of struggling states and municipalities faced budget constraints and increased threats to neighborhood stability. To address this issue, President Obama’s Administration established the Hardest Hit Fund (HHF).
The HHF |
WHAT IS THE HARDEST HIT FUND?
The Hardest Hit Fund (HHF) program, initially launched in February 2010, was established under the Troubled Asset Relief Program or TARP to make available targeted aid to families in states hit hard by the economic and housing market downturn. As part of the Obama Administration’s overall strategy for restoring stability to housing markets, HHF provides funding for state Housing Finance Agencies (HFAs) to develop locally-tailored foreclosure prevention solutions in areas that have been hard hit by home price declines and high unemployment. From its initial announcement, this program evolved from a $1.5 billion initiative focused on HFAs in the five states with the steepest home price declines and the vast majority of underwater homeowners. Today, the program has expanded to a broader-based $7.6 billion initiative encompassing 18 states and the District of Columbia. States were selected for funding either because they were struggling with unemployment rates at or above the national average or steep home price declines greater than 20 percent. Each state’s program was designed and is administered by that state’s HFA[1]. State HFAs have until the end of 2017 to utilize funds allocated under HHF[2]. [1] " What Is TARP?" What Is TARP? March 10, 2015. Accessed March 17, 2015. http://www.treasury.gov/initiatives/financial-stability/about-tarp/Pages/what-is-tarp.aspx. [2] " Hardest Hit Fund." Hardest Hit Fund. October 8, 2013. Accessed March 17, 2015. http://www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/default.aspx. |
Indiana's Story
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HOW IS INDIANA USING HHF'S TO TACKLE BLIGHT & FORECLOSURES?
According to a report by Sauter and Frohlich (2013) roughly 30% of the 16,618 foreclosed homes have been abandoned. A presentation by the Indiana Foreclosure Prevention Network (2015) estimates as many as 50,000 blighted and abandoned properties in Indiana. Vacant properties blight neighborhoods, reduce property values, foster crime and disease, and drain local government resources, thereby negatively impacting Indiana homeowners and neighborhoods. Coming to closure on vacancies is a challenge for Indiana’s cities and towns as many Indiana communities lack the resources necessary to address this growing issue alone (Indiana Foreclosure Prevention Network 2015). To address the issue of foreclosed and vacant properties, the State of Indiana created a Blight Elimination Program (INBEP) as a component its Hardest Hit Fund Program. The Hardest Hit Fund funding across all states is now $9.6 billion. Indiana, through Indiana Housing and Community Development Authority (IHCDA), used of a portion of Indiana’s Hardest Hit Funds to demolish blight and abandoned homes that are beyond repair. As part of Hardest Hit Fund, Indiana was allocated $283.9 million and committed approximately $75 million on behalf of its INBEP program participants. As of the end of Q4-2017, IHCDA had disbursed $34.4 million of its HHF-INBEP allocation to demolish and green 2,106 across the state (Indiana Housing and Community Development Authority 2018). INBEP is designed to provide subsidies in the form of loans to allow applicants to acquire and demolish blighted residential structures. The goal of the INBEP is to stabilize property values and prevent foreclosures through the demolition, greening, and continuing maintenance of vacant and abandoned blighted residential properties throughout the state. To administer this program, the State of Indiana has been divided into six funding divisions based on county population size and percent of total state population (see Table 1 and Figure 2).
Source: Based on data provided by the Indiana Housing and Community Development Authority, 2014.
Any local unit of government wishing to apply for funds to eliminate blighted homes had to do so to IHCDA by their division deadline. Applicants applied for funds from the funding division in which their county is located[1]. Approved applicants will be able to demolish blighted properties and offer a variety of end uses for newly cleared lots. A Site Evaluation Matrix (SEM) must be completed for every property. The SEM was designed to create a standard for the residential structures that may be demolished through the INBEP. The SEM focuses on determining the habitability and structural integrity of a property. The SEM also examines the impact of a property on public safety. Currently, there are over 60 cities and towns who have been awarded funding and are participating in the INBEP (see Figure 2 above).
[1] "1-877-GET-HOPE." Hardest Hit Fund. Accessed March 17, 2015. http://www.877gethope.org/blight. |
**Disclaimer: The first INBEP awards were made in February 2014 with the first demolitions occurring in August 2014. Blight Elimination Program participants were selected through an application process open to all Indiana communities. The final program awards were made in January 2017. The program will conclude in 2019. As of December 2018, there were 2, 570 demolitions completed. IHCDA Staff anticipate demolitions will continue through December 2020. The Sagamore Institute’s review of INBEP is on-going. In conjunction with figures and data provided by IHCDA and other sources, statistical analysis relies on the availability of data provided by the Indiana Department of Local Government Finance (DLGF). The DLGF data is updated on an annual basis. The figures and statistical analysis available on this site will be updated quarterly. The current analysis available at www.inbep.org reflects the data available through December 31, 2018.