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NeighborWorksNeighborWorks®® AmericaAmerica

Neighborhood Stabilization

Program

AgendaAgenda• Overview of the Neighborhood Stabilization Program I (NSP I)• NSP I Examples• Summary of Neighborhood Stabilization Program II (NSP II)• Discussion

NSP ICreated by the Housing and Economic Recovery Act (HERA) of 2008• $3.92 billion in one-time grants to states, cities and counties (nonprofits not eligible)• Needs-based formula allocation• Based on Community Development Block Grant (CDBG) program: HUD administers it

NSP IINSP IIAdditional $2 billion allocated in the American Reinvestment and Recovery Act (ARRA) of 2009

• Will be a competitive application process

• Nonprofits can apply • HUD to release guidelines in May

NSP I RequirementsNSP I RequirementsIntent is to help stabilize neighborhoods affected by foreclosure.

Jurisdictions had to target funds to “areas of greatest need”.

Minimum of 25% of funds must be used to create housing for <50% AMI; all housing to benefit < 120% AMI.

NSP I Requirements NSP I Requirements (Cont.)(Cont.)No more than 10% for

administration.Foreclosed properties must be

purchased at a discount (min. 5% up to 15%).

NSP I Eligible UsesNSP I Eligible UsesA. Establish financing mechanisms for purchase and redevelopment of foreclosed homes.B. Purchase and rehabilitate properties that have been abandoned or foreclosed upon. C. Establish and operate land

banks for homes and residential properties that have been foreclosed upon.D. Demolish blighted structures.E. Redevelop demolished or vacant properties.

NSP I TimelineNSP I TimelineJurisdictions filed final Action

Plans in February, 2009.HUD approvals followed later in

February.Jurisdictions have 18 months

after HUD approval to obligate funds.

Funds not obligated w/in 18 months may be recaptured and re-allocated by HUD.

NSP I Examples

CaveatsCaveatsJurisdictions have just started to implement their programs

Few results available yetConsider these “emerging practices”

All these jurisdictions have other NSP programs besides those featured here

NSP I- Example 1NSP I- Example 1San Bernadino County, CA

Financing Mechanism: Purpose- “rapid re-occupancy” To help first-time homebuyers

quickly purchase and occupy foreclosed single family homes before vandalism and blight become acute.

0% Downpayment: 3.5-5% of purchase price

San Bernadino County, San Bernadino County, CA (Cont.)CA (Cont.)Target PopulationoFirst-Time Homebuyers; andoUp to 120% of AMI; andoFHA creditworthy

May be combined with the County’s NSP-funded rehab program if property needs repairs

San Bernadino County, San Bernadino County, CA (Cont.)CA (Cont.)Downpayment Assistance

Planned Production

NSP Funds: $2.5 million# of Units: 85NSP Funds/Unit: $29,412/unit

NSP I: Example 2NSP I: Example 2Miami-Dade County, FL

Purchase & Rehabilitation:Purpose- “multi-family housing” To purchase & rehab multi-

family properties for continued use as rental property.

Units to be purchased by the County; a partner entitlement city; or nonprofit or forprofit developers under contract with the County

Miami-Dade County, FLMiami-Dade County, FLThe County will conduct property appraisals, & negotiate discounted purchase prices

30 year affordability restrictionsTargeted to neighborhoods in top two priority areas (identified by “areas of greatest need” analysis)

Miami-Dade County, FLMiami-Dade County, FLPurchase & RehabPlanned Production

NSP Funds: $21.57 million# Units: 172NSP Funds/Unit: $125,400

NSP I- Example 3NSP I- Example 3Tampa, FL

RedevelopmentPurpose- “new construction on

cleared lots”To create new housing on lots

cleared by NSP funds that Tampa allocated to demolition of foreclosed properties

0% deferred payment loan

Tampa, FLTampa, FLUp to 40 lots will be clearedCleared lots may be landbanked

up to 10 yearsLots will be cleared in a handful

of target neighborhoodsTampa will issue RFQs to identify

Housing Partners to help with redevelopment

RFQ will make creation of an “interdisciplinary team” a competitive criterion in the RFQ

Tampa, FLTampa, FLRedevelopmentPlanned Production

NSP Funds: $25.41 million# Units: N/A*NSP Funds/Unit: N/A*

*SF or MF units to be constructed on up to 40 cleared lots

NSP I Example # 4NSP I Example # 4Genesee County, MI

LandbankingPurpose- To demolish blighted

structures that are already owned by the Genesee County Land Bank Authority. Vacant lots may be held or redeveloped as housing.

Genesee County, MIGenesee County, MIPlanning Commission staff, &local

inspectors & assessors will help identify properties

Genesee County will subcontract to the Genesee County Land Bank Authority to oversee demolition

The County will work with banks and FHA to acquire properties, help clear titles, etc.

Leverage from TIFs; Genesee County downpayment assistance; private resources

Genesee County, MIGenesee County, MILandbankingPlanned Production

NSP Funds: $1,800,000 million

# Units: 200NSP Funds/Unit: $9,000

NSP I Example #5NSP I Example #5North Las Vegas & Clark County, NV

Housing CounselingPurpose- HBE for households up

to 120% of AMI seeking to purchase NSP-assisted housing.

HUD approved counseling agencies only.

North Las Vegas & Clark North Las Vegas & Clark County, NVCounty, NV

An RFP process will be used to allocate fundsMinimum of 8 hours counseling requiredAssumes 10 households will be counseled for

every 1 that proceeds to purchaseTarget areas include very distressed census

tracts where significant public investment has already occurred, with more planned.

Leverage includes $93 million in MRB funding set aside by the state housing finance agency

North Las Vegas & Clark North Las Vegas & Clark County, NVCounty, NVHousing CounselingPlanned Production

NSP Funds: $525,000# Units: 200NSP Funds/Unit: $100

Paying for NSP ActivitiesPaying for NSP ActivitiesNSP grantees may fund sales costs,

closing costs, & reasonable developer’s fees related to housing rehab or new construction activities.

HOWEVER

NSP regs prohibit NSP-assisted housing to be sold at a profit.

Accurately analyze development costs so they can be reimbursed as fees.

(Work this out with NSP jurisdiction)

NSP IINSP IICreated by the American

Recovery & Reinvestment Act (ARRA), February 2009

$2 billion in funding for NSPSome changes are retroactive to

NSP IOthers apply only to NSP IIStay tuned for more details from

HUD

Changes Affecting both Changes Affecting both NSP I & IINSP I & IIElimination of the Program Income

SectionExpansion of the Land Banking

Eligible UseRedevelopment will be Restricted to

Housing Only- no non-residential usesNSP Grantees may not Refuse to

Lease to Section 8 RecipientsAdditional Tenant Protections for

those with Leases Signed Before Foreclosure

Changes Affecting NSP II Changes Affecting NSP II OnlyOnlyCompetitive Allocation Process

(states, local gov’ts, nonprofits)Up to $200 million for Capacity

BuildingExpenditure Timeline: Grantees

must spend 50% of allocated funds w/in 2 yrs.; 100% w/in 3 yrs.

No NSP Funds may Demolish Public Housing

10% Cap on Demolition

Changes Affecting NSP II Changes Affecting NSP II Only (Cont.)Only (Cont.)NSP II Allocation Criteria:

1. Areas of Greatest Need2. Capacity to Execute

Projects3. Leveraging Potential4. Others TBD by HUD

DiscussionDiscussion