The recent subprime mortgage crisis has impacted local governments considerably. This article examines some of the impacts, recovery strategies, and new approaches to consider for encouraging economic revitalization in the neighborhoods that are most severely affected. This article was first published by the International Municipal Lawyers Association (IMLA), 7910 Woodmont Ave., Bethesda, MD. 20814, and is reproduced with the permission of IMLA. IMLA is a non-profit, professional organization that has been an advocate and resource for local government attorneys since 1935. IMLA serves more than 2,500 member municipalities and local government entities in the United States and Canada, and is the only international organization devoted exclusively to addressing the needs of local government lawyers. Further information about IMLA is available at IMLA's website, www.imla.org.