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Creates opportunities for people to live in affordable homes, improve their lives and strengthen their communities

Key Features of NSP 2 Beyond the Neighborhood Stabilization Program Training Session Reclaiming Vacant Properties Conference Louisville, KY June 1, 2009 Sarah M. Greenberg NeighborWorks ® America. NeighborWorks ® America.

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Creates opportunities for people to live in affordable homes, improve their lives and strengthen their communities

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  1. Key Features of NSP 2Beyond the Neighborhood Stabilization Program Training SessionReclaiming Vacant Properties Conference Louisville, KYJune 1, 2009Sarah M. GreenbergNeighborWorks® America

  2. NeighborWorks® America • Creates opportunities for people to live in affordable homes, improve their lives and strengthen their communities • Provides financial support, technical assistance, and training for community development efforts around country • The NeighborWorks Network: • Over 235 independent housing and community development nonprofit organizations • All 50 states, Puerto Rico and D.C. - 4,400 communities • $12.25 billion investedin America’scommunities • 111,000 families have become homeowners • 638,000 families have been educated about the home buying process

  3. NeighborWorks®Center for Foreclosure Solutions • Began as pilot in 2005 • Now the nation’s leading nonprofit foreclosure mitigation program • Training for foreclosure counselors • Public outreach, educational, and awareness campaigns • Sustainable programs in cities and states with high foreclosure rates • Post-foreclosure and neighborhood stabilization solutions

  4. NeighborWorks® America’s Stable Communities Program • Support the Network and the field in efforts to turn the foreclosure crisis into an opportunity to build sustainable communities • Help facilitate the swift but responsible disposition of foreclosed properties and the ability of communities return them to productive use • Resources/strategies: • Website • Training/workshops • Tools/publications • Grants/technical assistance • Success Measures – impact evaluation pilot • National Community Stabilization Trust

  5. NeighborWorks® Stable Communities Program: www.StableCommunities.org

  6. Neighborhood Stabilization Program • Round II: Just the Facts • NOFA released May 4, 2009 • $2 billion in additional funds awarded competitively (vs. formula) • $50 million for capacity building, $1.93 billion for program funds (HUD retained $20 million for program administration) • Eligible grantees – states, units of government, nonprofits and consortia of nonprofits, for-profits in consortia • $5 million minimum application (100 units), limit 10% for administrative expenses • Applications due July 17th at 5:00 p.m. EST • Last date for HUD to notify selected applicants: December 1, 2009 • Last date to make funds available: February 17, 2009

  7. Neighborhood Stabilization Program • Changes retroactive to Round 1: • Land bank include operational costs and expanded to residential properties, not just foreclosed homes • Redevelopment of vacant or demolished property limited to housing • No demolition of public housing • Repealed challenging program income provisions • Key changes from Round 1: • Competitive application process • Nonprofits are eligible grantees • Greater tenant protections • Demolition activities limited to 10% • Must expend 50% within 2 years, 100% within 3 years • 1% discount per property, 5% per grantee • Gut rehab must meet Energy Star for New Homes Standard • Streamlined citizen participation

  8. Neighborhood Stabilization Program • Eligible Uses (same as Round1): • Financing Mechanisms (foreclosed homes and residential properties) • Purchase and rehab (foreclosed or abandoned homes and residential properties) • Land-Banks (foreclosed homes and residential properties) • Demolition (blighted structures) • Redevelopment as housing (demolished or vacant properties)

  9. Neighborhood Stabilization Program • Round 2 attempts to address the challenges inherent in Round 1, by focusing on: • Regional approaches • Geographic targeting (concentration of resources) • Capacity to carry out activities • Comprehensive planning • Leveraging resources • Public/private partnerships • Rational use of land • Interventions likely to succeed • Requiring energy efficiency • NSP 2 has some challenges, but a good NSP 2 application has a real chance of becoming a successful neighborhood stabilization project!

  10. Neighborhood Stabilization Program • Application threshold requirements: • Average foreclosure need index score or vacancy risk index score of 18 for census tracts served • Data available at http://www.huduser.org/nspgis/nsp.html • Demonstrated organizational capacity (75 units in past 24 months) • Income targeting (120%, with 25% to 50% AMI or below)

  11. Neighborhood Stabilization Program • Six Scoring Factors (plus past performance) • Up to 150 points • Minimum of 115 points required for funding • HUD may make adjustments • Factor 1: Need/Extent of the Problem (40 pts) • Target geography (threshold factor) (10 pts) • Market conditions (30 pts) • Absorption rate/months of inventory • Income characteristics • Housing cost burden • Cause of the problem • Identify NSP activities most likely to stabilize

  12. Neighborhood Stabilization Program • Factor 2: Demonstrated capacity of applicant and staff (40 pts) • Past experience (30 pts) • Past 24 months • Skills of your staff • Results • Management structure (10 pts) • Include references

  13. Neighborhood Stabilization Program • Factor 3: Soundness of approach (45 pts) • Proposed activities (15 pts) • Project completion schedule (5 pts) • Income targeting (5 pts) • Continued affordability (5 pts) • Consultation, outreach, communication (5 pts) • Performance and monitoring (10 pts)

  14. Neighborhood Stabilization Program • Factor 4: Leverage or removing substantial negative effects (10 pts) • Strictly quantitative • All scores will be indexed, top third in either category will receive maximum points, second third will receive 5 points, bottom third will receive zero points • Leverage = firm commitments/NSP 2 funds • Cash, in-kind, donated land or services • No sweat equity or mortgages to homebuyers • Removal of negative effects = (Units acquired and rehabbed + units demolished)/total vacant residential units in target area

  15. Neighborhood Stabilization Program • Factor 5: Energy efficiency and sustainable development (10 pts) • Accessibility to transit (4 pts) • Green building standards (3 pts) • Reuse of all NSP sites (1 pt) • Deconstruction (1 pt) • Other sustainable development factors (1 pt)

  16. Neighborhood Stabilization Program • Factor 6: Neighborhood transformation and economic opportunity (5 pts) • Consistency with a comprehensive, regional, or multi-jurisdiction plan • Demonstrate how NSP activities relate to and increase the effectiveness of the plan(s)

  17. Neighborhood Stabilization Program • Environmental reviews • Nonprofits applying without a government entity as a co-applicant must rely on HUD to perform environmental reviews • If a government entity is part of the consortium application, they must complete environmental reviews in their jurisdictions • The strongest application = a regional consortium that includes local government serving each target area and includes nonprofit and/or for/profit partners with demonstrated capacity

  18. National Community Stabilization Trust • A joint venture launched in 2008 and sponsored by: • Enterprise Community Partners • Housing Partnership Network • LISC • National Urban League • National Council of La Raza • NeighborWorks America • The Stabilization Trust facilitates the transfer of foreclosed and abandoned property from financial institutions nationwide to localities to promote neighborhood stability. • Creates a bridge between twoworlds – the financial institution servicer/REO departments and state and local housing providers.

  19. National Community Stabilization Trust • Transfer Properties - Facilitate the Effective Transfer of Foreclosed and Abandoned Properties to Localities • Financing - Provide Debt and Equity Financing to Support Local and State Efforts • Capacity Building - Organize and Facilitate Local Collaborations Working Through the Sponsor Organizations • Focal Point - Serve as an Industry “Voice” for Foreclosures and Neighborhood Stabilization

  20. Transfer Foreclosed Properties without the Trust Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Community Community Community Community 20

  21. Transfer Foreclosed Properties with the Trust Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer Lender / Servicer MBS / Servicer NATIONAL COMMUNITY STABILIZATION TRUST Community Community Community Community 21

  22. Thank You For More Information: Sarah M. Greenberg NeighborWorks America sgreenberg@nw.org stablecommunities@nw.org

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