WASHINGTON -- The United States Senate late last night unanimously adopted an amendment authored by Senator Mary Landrieu, D-La., to make $2.25 billion in Neighborhood Stabilization Program (NSP) dollars in the Economic Recovery Package available to redevelop properties damaged or destroyed by natural disasters. The NSP was created in the 2008 Foreclosure Prevention Act to allocate money to localities for repurchasing, rehabilitating, renting or reselling foreclosed or blighted properties. Sen. Landrieu's provision expands the eligible uses of these funds to include properties impacted by natural disasters.

"The inclusion of this commonsense provision in the package is a huge win for Louisiana, the Gulf Coast and Midwestern states that have been devastated by recent natural disasters — and it comes at no additional cost to taxpayers," Sen. Landrieu said.

The percentage of homes along the Gulf Coast that were destroyed as a result of Hurricanes Katrina and Rita far exceeds the foreclosure rate in Louisiana. Almost 80 percent of the homes in St. Bernard Parish sustained major or severe damage as a result of the 2005 storms. Louisiana received $38 million in NSP funds in last year's foreclosure bill, but none could be used to redevelop Katrina and Rita-destroyed properties.

"We have another opportunity to send NSP funds to Louisiana in the economic recovery package," Sen. Landrieu said. "The provision the Senate passed last night provides the flexibility to free this money to redevelop properties destroyed by disasters, which will greatly benefit the recovery effort along the Gulf Coast."

Almost 8,000 disaster-impacted properties in Louisiana will benefit from the Landrieu provision: 3,887 in Orleans Parish, 3,790 in St. Bernard Parish, 115 in Jefferson Parish and 15 in Washington Parish. All of these properties have cleared environmental review and are "shovel ready." In addition, properties in Presidentially-declared disaster areas in the Midwest will be able to use these funds to redevelop disaster-destroyed properties.

"Thousands of blighted properties dot neighborhoods all across Louisiana, including many sold to the state through its Road Home program after Katrina and Rita," said Paul Rainwater, Executive Director of the Louisiana Recovery Authority. "These properties are more than just eyesores -- they pose threats to safety and public health and deter economic development and rebuilding in many communities.

"Having a source of federal funds dedicated to demolishing these blighted homes is necessary to restore our struggling neighborhoods, redevelop returning communities and remove some routinely flooded properties from commerce. We thank Senator Landrieu for recognizing what a drain these properties are on Louisiana."

"This amendment marks a critical step forward for the people of New Orleans who want to see their neighborhoods come back," said Richard Monteilh, Executive Director of the New Orleans Redevelopment Authority (NORA). "Stimulus funding can now be accessed by disaster-impacted cities like New Orleans to redevelop demolished or vacant properties."

According to the National Foreclosure Prevention and Neighborhood Stabilization Task Force, the NSP funds in the bill will help communities hit hard by foreclosures to purchase and rehabilitate an additional 57,000 properties. In doing so, this program will also create 45,000 jobs.

Should the Economic Recovery Package pass the Senate, the Senate's version will be reconciled with the version passed by the House of Representatives.

Cosponsors of Sen. Landrieu's amendment include: Sen. Charles Grassley, R-Iowa; Sen. Tom Harkin, D-Iowa; Sen. Kay Bailey Hutchison, R-Texas; Sen. Thad Cochran, R-Miss.; Sen. Ben Nelson, D-Neb.; and Sen. Roger Wicker, R-Miss.