Vermont Neighborhood Stabilization Program (VT NSP) Approved Plan Agency of Commerce and Community Development Department of Housing and Community Affairs

Agenda Approved VT NSP Plan NSP Regulations VT Foreclosure Process Application Review Short Break Questions & Answers

Vermont Neighborhood Stabilization Program (VT NSP) Approved Plan Goals Acquire, renovate and sell/rent foreclosed or abandoned residential housing to households at or below 120% of area median income; Allow municipalities to locally address the residential foreclosure problem of their community; Provide an opportunity for- profit and non-profit entities to reutilize foreclosed properties;

Vermont Neighborhood Stabilization Program (VT NSP) Approved Plan Goals Preserve foreclosed upon assisted housing; Ensure long-term affordability; Alleviate blighted and abandoned buildings; and Support and enhance designated downtowns, villages, new neighborhoods and growth centers.

Vermont Neighborhood Stabilization Program (VT NSP) Approved Plan Three-Prong Approach I. Homeownership Acquisition and Rehabilitation Program (HARP) - $7 million II. Municipal Program - $5.5 million III. Project-Specific Program - $6.5 million

I. Homeownership Acquisition and Rehabilitation Program (HARP) Funding to the Vermont Housing and Finance Agency (VHFA) –Purchase and rehab abandoned or foreclosed upon residential properties to sell, rent, or redevelop –Establish land banks for foreclosed upon homes

I. Homeownership Acquisition and Rehabilitation Program (HARP) Acquire, rehab and sell properties Transfer or sell properties to housing organizations All to be sold to income eligible homeowners rented to income eligible households

I. Homeownership Acquisition and Rehabilitation Program (HARP) Targeted Counties –Essex –Orleans –Caledonia –Orange –Rutland –Windham –Southern Windsor

I. Homeownership Acquisition and Rehabilitation Program (HARP) Estimated Benefit 55 Households – at or below 120% of area median income

I. Homeownership Acquisition and Rehabilitation Program (HARP) VHFA Overview

II. Municipal Program Locally address residential foreclosure problem in Vermont communities Municipal applicants

II. Municipal Program Eligible Uses –Establish financing mechanisms purchase and redevelopment of foreclosed upon homes and residential properties –Purchase and rehabilitate abandoned or foreclosed upon homes and residential properties sell, rent, or redevelop –Establish land banks –Demolish blighted structures –Redevelop demolished or vacant properties

II. Municipal Program Acquire, rehab and sell properties Transfer or sell properties to housing organizations All to be sold to income eligible homeowners rented to income eligible households

II. Municipal Program Targeted Communities –City and Town of Barre –Town of Bennington –City of Burlington –Town of Hardwick –City and Town of Newport –City and Town of Rutland –Town of St. Johnsbury –Town of Springfield The above are encouraged to work with contiguous communities with similar foreclosure problems.

II. Municipal Program Estimated Benefit 50 homeownership and rental units –13 Households – 120% - 81% of area median income –12 Households – 80% - 51% AMI –25 Households – 50% or below AMI

III. Project-Specific Program Address projects more than 4 units per structure or properties smaller than 4 units but together comprise more than four units For-profit or non-profit applicants

III. Project-Specific Program Eligible Uses –Establish financing mechanisms purchase and redevelopment of foreclosed upon homes and residential properties –Purchase and rehabilitate abandoned or foreclosed upon homes and residential properties sell, rent, or redevelop –Establish land banks –Demolish blighted structures –Redevelop demolished or vacant properties

III. Project-Specific Program Targeted Communities

III. Project-Specific Program Estimated Benefit 50 rental and homeownership units –13 Households – 120% - 81% of area median income –12 Households – 80% - 51% AMI –25 Households – 50% or below AMI

VT NSP Requirements Serve Low, Moderate, and Middle Income (LMMI) –Low < 50% Area Median Income –Moderate < 80% Area Median Income –Middle <120% Area Median Income Housing Public Facilities

VT NSP Requirements At minimum 25% of the VT Grant ($4.9 million) must be used for the: –purchase & redevelopment of abandoned or foreclosed upon residential properties to serving less than 50% Area Median Income BLIGHT DOES NOT COUNT!!!

VT NSP Requirements Acquisition cost – no more than 90% the appraised value

VT NSP Requirements Sale price –low as 50% total cost of acquisition, discharge of liens, rehab and transaction costs –no more than the total of those costs, less 10% –no profit earned on the sale if abandoned or foreclosed-upon residential property sold to an individual as a primary residence

VT NSP Requirements Rehabilitate to comply with: –Vermont Department Fire and Public Safety –CDBG Lead Paint regulations –Local building codes, and/or –Zoning permit requirements Incorporate green & energy efficient built environments

VT NSP Requirements If a home assisted is sold: –Sold to homeowners at or below 120% AMI occupied as primary residence receive at least 8 hours of HUD certified, home ownership counseling, secure financing that is not subprime, and agree to a continued affordability agreement

VT NSP Requirements If a home assisted is rented: –Rented to households at or below 120% AMI Occupied as primary residence

VT NSP Requirements Affordability, at a minimum: –15-year term - rehab properties –20-year term - new construction

VT NSP Requirements Community Development Block Grant (CDBG) Federal Regulations – generally apply to NSP funds

VT NSP Requirements Uniform Relocation Act (URA) –Appraisal required to establish statutory purchase discount –All acquisitions must be voluntary

VT NSP Requirements Uniform Relocation Act (URA) –One to One replacement waived Only applies to LMI units that are demolished or converted using NSP funds Any reduction in units must be tracked just as the production of units is tracked

VT NSP Requirements Uniform Relocation Act (URA) –Relocation assistance remains the same –Must follow a residential anti- displacement and relocation plan Municipal Plan

VT NSP Requirements Environmental Review –Release of environmental conditions must be obtained –3 Levels of Review Exempt Categorically Excluded Assessment

VT NSP Requirements Environmental Review –Acquisition is Exempt If purchase and sales contract executed prior to application for federal assistance –Complete environmental review must still be conducted

VT NSP Requirements Environmental Review –Generally rehabilitation activities for single-family owner-occupied homes Categorically excluded

VT NSP Requirements Environmental Review –Substantial rehabilitation – Assessment Rehabilitation expenditures consist of greater than 75 % of the appraised value

VT NSP Requirements Environmental Review –Historic structures of 50 years or older must be reviewed by an “Authorized Historic Preservationist” See list on website – agement/HP%20Consultants.pdfhttp:// agement/HP%20Consultants.pdf

VT NSP Requirements Environmental Review –Demolition activities Historic structures Archaeologically sensitive

VT NSP Requirements Labor Standards Davis Bacon –Not applicable to single-family owner- occupied –Applicable to Single-family rental homes 8 or more units, commonly owned

VT NSP Requirements Davis Bacon –Applicable to 8 or more units of multi- family rental housing Same or contiguous parcel –Wage Rates must be obtained

VT NSP Requirements Procurement Non-Profits Must follow 24 CFR §85 Open and competitive process

VT NSP Requirements Procurement For-Profits Exempt from any Regulations for Procurement Employ prudent practices when using public funds

VT NSP Requirements Contracts –Must establish a written contract for any work to be paid for with federal funds

VT NSP Requirements Contracts –Bonding Requirements Bid Guarantee – 5% of bid price Performance Bond – 100% of contract price –Ensure fulfillment of contract obligations Payment Bond – 100% of contract price –Ensure payment to subcontractors

VT NSP Requirements Program Income –Income generated as a result of the use of the NSP funds, by public and private entities Sale Rental Redevelopment Rehabilitation

VT NSP Requirements Program Income –Within the 18 month window of obligation, income generated must reduce any new requisitions of NSP funds August 2010

VT NSP Requirements Program Income –Received prior to July 30, 2013 May be retained, if treated as CDBG funds –Income received by a private entity must always be returned

VT NSP Requirements Program Income –Received on or after July 30, 2013 Return to U.S Treasury Including the income from the Sale of rental housing – after that date

VT NSP Requirements Program Income –Received on or after July 30, 2013 May be retained with approval from HUD –Income in excess of the cost to acquire, rehabilitate – abandoned or foreclosed upon home or residential property

VT NSP Requirements Obligate funds –August 2010 –GRANTEE or SUB-GRANTEE, NOT VERMONT Expend funds & meet benefit –February 2013

VT Foreclosure Process Vermont Foreclosure Process

Application Selection & Review Process 1 Round - Rolling Acceptance –January - May –Scored and ranked with recommendation –CD Board –Decision 45-days from application submittal –Grant Agreement 35 days from decision

Application Selection & Review Process Competitive Factors –Need met –Readiness –Plan to encumber funds by August, 2010 –Capacity to undertake project on time and on budget –Ratio of units serving households at or below 50% AMI

Application Selection & Review Process Competitive Factors –Preservation of existing public subsidy –Longevity of benefit and affordability –Incorporation of energy efficiency and conservation –Location in designated downtown, village, new neighborhood or growth center

Application Selection & Review Process Competitive Factors –Elimination of health or safety issues –Sustainability –Cost effectiveness and leverage of NSP funds –Meeting other Consolidated Plan Priorities

Application Selection & Review Process Tiers A.Eligible – Targeted - At or below 50% AMI B.Eligible – Targeted - Not at or below 50% AMI C.Eligible – Not Targeted - At or below 50% AMI D.Eligible – Not Targeted - Not at or below 50% AMI Feasible yet unsuccessful applications will be ranked and maintained for future consideration should a successful application(s) fail to proceed toward fruition.

Vermont Neighborhood Stabilization Program (VT NSP) Approved Plan Short Break Questions & Answers Adjourn