The Department of Housing and Urban Development awarded an additional $1 billion in funding to all states along with a number of counties and local communities struggling to reverse the effects of the foreclosure crisis on Wednesday.

The grants represent the third round of funding through HUD’s Neighborhood Stabilization Program (NSP) and will provide targeted emergency assistance to state and local governments to acquire, redevelop or demolish foreclosed properties.

“These grants will support local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said Secretary Shaun Donovan. “We want to make certain that we target these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight.”

This is the third round of NSP grants and is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Like the earlier rounds of NSP grants, the funds will be used to purchase foreclosed homes at a discount and to rehabilitate or redevelop them in order to respond to rising foreclosures and falling home values.  ”We will be able to make investments that will reduce blight, bolster neighboring home values, create jobs and produce affordable housing,” said Donovan.

Today, 95 cents of every dollar from the first round of NSP funding is obligated – and is in use by communities, buying up and renovating homes, and creating jobs.

In addition to a third round of NSP funding, the Dodd-Frank Wall Street Reform and Consumer Protection Act creates a $1 billion Emergency Homeowners Loan Program to be administered by HUD.

The program will provide up to 24 months in mortgage assistance to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.  While HUD has yet to release the official details of the program, the agency previously said the loans will be a deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance.

Whether or not the program can assist borrowers with reverse mortgages who have fallen behind on taxes and insurance isn’t clear.  HUD said it will announce additional details, including the targeted areas and other program specifics when the program is officially launched in the coming weeks.