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NeighborWorks ® America

NeighborWorks ® America. Neighborhood Stabilization Program. Agenda. Overview of the Neighborhood Stabilization Program I (NSP I) NSP I Examples Summary of Neighborhood Stabilization Program II (NSP II) Discussion. NSP I Created by the Housing and Economic Recovery Act (HERA) of 2008

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NeighborWorks ® America

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  1. NeighborWorks®America Neighborhood Stabilization Program

  2. Agenda • Overview of the Neighborhood Stabilization Program I (NSP I) • NSP I Examples • Summary of Neighborhood Stabilization Program II (NSP II) • Discussion

  3. NSP I Created 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

  4. NSP II Additional $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

  5. NSP I Requirements • Intent is to help stabilizeneighborhoods 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.

  6. NSP I Requirements (Cont.) • No more than 10% for administration. • Foreclosed properties must be purchased at a discount (min. 5% up to 15%).

  7. NSP I Eligible Uses • Establish financing mechanisms for purchase and redevelopment of foreclosed homes. • Purchase and rehabilitate properties that have been abandoned or foreclosed upon. • Establish and operate land banks for homes and residential properties that have been foreclosed upon. • Demolish blighted structures. • Redevelop demolished or vacant properties.

  8. NSP I Timeline • Jurisdictions 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.

  9. NSP I Examples

  10. Caveats • Jurisdictions have just started to implement their programs • Few results available yet • Consider these “emerging practices” • All these jurisdictions have other NSP programs besides those featured here

  11. NSP I- Example 1 • San 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

  12. San Bernadino County, CA (Cont.) • Target Population • First-Time Homebuyers; and • Up to 120% of AMI; and • FHA creditworthy • May be combined with the County’s NSP-funded rehab program if property needs repairs

  13. San Bernadino County, CA (Cont.) Downpayment Assistance Planned Production NSP Funds: $2.5 million # of Units: 85 NSP Funds/Unit: $29,412/unit

  14. NSP I: Example 2 • Miami-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

  15. Miami-Dade County, FL • The County will conduct property appraisals, & negotiate discounted purchase prices • 30 year affordability restrictions • Targeted to neighborhoods in top two priority areas (identified by “areas of greatest need” analysis)

  16. Miami-Dade County, FL Purchase & Rehab Planned Production NSP Funds: $21.57 million # Units: 172 NSP Funds/Unit: $125,400

  17. NSP I- Example 3 • Tampa, FL Redevelopment Purpose- “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

  18. Tampa, FL • Up to 40 lots will be cleared • Cleared lots may be landbanked up to 10 years • Lots will be cleared in a handful of target neighborhoods • Tampa 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

  19. Tampa, FL Redevelopment Planned 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

  20. NSP I Example # 4 • Genesee County, MI Landbanking • Purpose- To demolish blighted structures that are already owned by the Genesee County Land Bank Authority. Vacant lots may be held or redeveloped as housing.

  21. Genesee County, MI • Planning 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

  22. Genesee County, MI Landbanking Planned Production NSP Funds: $1,800,000 million # Units: 200 NSP Funds/Unit: $9,000

  23. NSP I Example #5 • North Las Vegas & Clark County, NV Housing Counseling • Purpose- HBE for households up to 120% of AMI seeking to purchase NSP-assisted housing. • HUD approved counseling agencies only.

  24. North Las Vegas & Clark County, NV • An RFP process will be used to allocate funds • Minimum of 8 hours counseling required • Assumes 10 households will be counseled for every 1 that proceeds to purchase • Target 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

  25. North Las Vegas & Clark County, NV Housing Counseling Planned Production NSP Funds: $525,000 # Units: 200 NSP Funds/Unit: $100

  26. Paying for NSP Activities • NSP 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.

  27. Accurately analyze development costs so they can be reimbursed as fees. (Work this out with NSP jurisdiction)

  28. NSP II • Created by the American Recovery & Reinvestment Act (ARRA), February 2009 • $2 billion in funding for NSP • Some changes are retroactive to NSP I • Others apply only to NSP II • Stay tuned for more details from HUD

  29. Changes Affecting both NSP I & II • Elimination of the Program Income Section • Expansion of the Land Banking Eligible Use • Redevelopment will be Restricted to Housing Only- no non-residential uses • NSP Grantees may not Refuse to Lease to Section 8 Recipients • Additional Tenant Protections for those with Leases Signed Before Foreclosure

  30. Changes Affecting NSP II Only • Competitive Allocation Process (states, local gov’ts, nonprofits) • Up to $200 million for Capacity Building • Expenditure 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

  31. Changes Affecting NSP II Only (Cont.) • NSP II Allocation Criteria: • Areas of Greatest Need • Capacity to Execute Projects • Leveraging Potential • Others TBD by HUD

  32. Discussion

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